The debate over electricity pricing in Nigeria took a critical turn today as the Nigerian Independent System Operator (NISO) issued a stark warning that the average Nigerian household cannot withstand further increases in power tariffs.
Engr. Abdu Mohammed, the Managing Director and CEO of NISO, stated that rising inflation and a sharp decline in purchasing power are pushing millions of citizens deeper into energy poverty, making the cost of electricity increasingly unbearable.
Speaking on Thursday at the 5th Annual Conference of the Power Correspondents Association of Nigeria (PCAN) in Abuja, Mohammed tackled the complex theme of “Cost-Reflective Tariff vs. Energy Poverty.”
He noted that while operators urgently require cost-reflective tariffs to cover operational expenses and attract investment, this must be balanced against the plight of the consumer.
Engr. Abdu Mohammed: “The tariff question is about finding the equilibrium between commercial sustainability and social fairness, between ensuring that our operators remain viable and ensuring that no Nigerian is pushed further into energy poverty.”
Mohammed stressed that energy poverty is not merely about a lack of connection but the inability to afford sufficient power for daily life and productive ventures, impacting everything from small businesses to children’s ability to study at night.
The NISO boss lamented that despite numerous tariff adjustments over the past decade under the Multi-Year Tariff Order (MYTO) framework, the sector still grapples with massive liquidity shortfalls, poor investment in infrastructure, and weak supply reliability. He indicated that political and social pressures often result in tariffs being kept below actual cost levels, creating a market struggling for survival.
His remarks underscore the dilemma facing the government: how to fulfill its pledge to reduce costly subsidies and stabilize the power market without completely alienating consumers already burdened by high living costs.
