On Thursday, the Nigerian Electricity Regulatory Commission (NERC) announced that gas used for power generation would increase by 132 percent coming into effect next month, AllAfrica reported.
The current price is US$2.50 per MMBTU (Million Metric British Thermal Units) and will go up to US$3.30 per MMBTU (Million Metric British Thermal Units) the increase was approved by both NERC and the Ministry of Petroleum, AllAfrica reported.
Vice Chairman of NERC, Mohammed Bello, spoke at the bi-annual minor review of the Multi Year Tariff Order (MYTO-2) on Wednesday, saying that this adjustment was necessary to ensure sustainable and reliable power supply, even though alternative plans were already in place to facilitate the same goal, AllAfrica reported.
The idea behind the 15 year Multi-Year Tariff Order was to set guidelines for the basis, pricing and procedures of the Nigerian energy sector where investors felt previous tariffs’ needed to be reviewed, AllAfrica reported.
Since the implementation of the MYTO in 2008, gas prices have been regulated. The 2014 rate was originally US$1.80 MMBTU, AllAfrica reported.
‘From what I have seen in the initial report, not much has changed. The tariff review is a sensitive issue to the consumer who considers paying higher and not seeing improvement in electricity supply. But there is a general consensus that this is the way to go. By paying what is due, this is how the power will begin to improve’, Bello said.