The federal government has completed plans to almost double the cost of electricity from April 1, 2012. A kilowatt hour of electricity, which costs consumers N10 currently, will soon cost about N19, an increase of 88 per cent. According to a report by the Financial Times yesterday, the new rates would be announced before the privatisation of the 18 power generation, distribution and transmission companies this year.
The newspaper quoted the federal government as saying that higher “cost-reflective tariffs” for residential and commercial electricity customers were necessary to ensure that investors could make profits. Under the new pricing regime, tariffs will rise 25 to 88 per cent, though most customer classes will see a 50 per cent increase in their bills. The government hopes that cushioning the blow on the poorest consumers – a policy absent during the fuel subsidy removal – will ensure that there is no repeat of the public outcry.