New power tax system launched in Nigeria

power__ramblaThe new tariff system is expected to stabilise the power sector. (Image source: Rambla/Flickr) Nigeria has launched a new power tariff system under which rich consumers will pay more while power costs will be sufficiently reduced for poorer users

Affluent consumers, commercial and industrial houses will pay significantly higher rates above the NGN 4/Kwh (US$0.024/Kwh) that was being paid up until now.

The Nigerian government is disbursing a sum of NGN 100 billion (US$615 million) as a stabilisation fund to subsidise the costs to be borne by consumers rated below the NGN 24/Kwh over the next two years. Middle income consumers would be expected to pay between NGN 11 and NGN 12/Kwh.

The highest rate would be paid by consumers living in urban and posh areas of the country like Maitama, Asokoro in Abuja, Ikoyi and Banana Island in Lagos.

Nigerian minister of power Barth Nnaji said, “The new tariff regime was formulated to stabilise the sector and also attract private investments for it.”

He also added that the new system would ensure good governance in the Nigerian Electricity Supply Industry (NESI), eliminate energy waste and guarantee cost-reflective pricing.

The power ministry has also been planning to distribute free energy-saving bulbs that will help bring down electricity bills. These four-watt bulbs are expected to replace the energy-consuming ones currently in common use.

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