By Etuka Sunday
Electricity consumers in Abuja yesterday predicted a significant tariff increment due to the new domestic price of $3.30 for gas-to-power which was scheduled to commence in December 2014.
The consumers in a sharp reaction after the Nigerian Electricity Regulatory Commission (NERC)’s presentation on the minor review of the Multi Year Tariff Order (MYTO) II, feared that the new price and other factors may trigger a significant increase in the new MYTO II review to be implemented on January 1st, 2015.
This was after NERC announced that “The Federal Ministry of petroleum resources in collaboration with the Commission has agreed to a gas price of $2.50/Million British Thermal unit (MMBTu) and transportation cost of $.80 effective December 2014.”
Lamenting, a consumer representing Abuja consumer group said “There was no gas price increase in June 2014, yet we had a tariff increase.
With this $1.00 increase in gas price, there is the possibility of a significant increase in the tariff far from what consumers may expect.”
However, the NERC’s Vice Chairman, Engr. Mohammed Bello while speaking said, consumers complain of paying much for electricity while they are yet to see improvements, “but I believe that this is the process by which power supply will improve.”
Meanwhile, a presentation by Roland Achor of NERC Tariff and Rates stated that the current inflation rate was 8.3percent while the previous was 7.8percent. However, he said the bench mark for MYTO II was 13percent.
The CBN Exchange Rate to $1 is N178 benchmarked, but what obtained is N156. New Domestic Gas price which was $1.80 will be $3.30/MMBTu, a difference of $1.00. Although consumers have described this as worrying, government said it will enhance more flow of gas-to-power to improve electricity supply.
Currently, the average generation capacity in the review is 3,657megawatts which is 251mw different from the input in the previous tariff rate. NERC said its projection is 5,556mw.
In her speech, the Commissioner for Market Competitions and Rates Division, Mr Eyo Ekpo said the aggregates of the review will be arrived at with the inputs from the stakeholders in preparation for its announcement shortly in December.