•New tariff not likely to affect manufacturers – MANBy Emeka Anaeto, Business Editor, Udeme Akpan, Obas Esiedesa, Yinka Kolawole, Ediri Ejoh & Mariam Eko
Meanwhile, the new tariff regime is expected to reduce subsidy costs by N137.1 billion per month following the decision to raise tariff for about two million consumers by 230 percent. NERC raised the cost of power generation by 63 percent from N63.8/kWh to N103.9/kWh and cost of transmission & administration by 34 percent from N6.8/kWh to N9.1/kWh.
“Ninety-five percent of the DisCos are technically insolvent, meaning they have never been able to sufficiently generate money that will cover their loss with profit. A lot of them are exposed in terms of lending, a lot of them are under receivership and whichever way you look at it, the power sector is challenged”, he added.
On his part, Prof. Wumi Iledare, Professor of Petroleum Economics and Policy Research, said: “New tariff is perhaps based on the increase in the wellhead price for gas. We must agree, however, N68 per KWhr is a price ceiling significantly below the market clearing price. N68 is also not anywhere close to the fair return price of an economic good with decreasing marginal cost and average cost curve.