Fashola offers reasons for increase in electricity tariff

The Minister of Power, Works and Housing, Hon. Babatunde Fashola, on Tuesday, rationalised the resolve by the Federal Government to increase electricity tariff.

He said the increment was meant to attract investors into the power sector, since only a few among them were willing to invest there.

Fashola said this during a budget defence by his ministry before the Senate Committee on Power.

He said that investors were already indicating a resolve to pull out of the power sector because they felt that they were not going to get returns on their investments.

The Minister, who said the Ministry had secured the endorsement of the National Assembly on tariff increase, said that the Ministry would continue to widen the scope of the power sector.

He said that, “Electricity is a product. It is made from raw materials and some of the raw materials are gas. So, the issue of tariff is the single issue of price, when the raw materials of course will go up the price cannot stay the same.

“You may ask: ‘why can’t we have more power before the price goes up?’. I am also a consumer, but we see that investments in power are not where they should be.

“If the recovery of price, the income and profit do not make economic sense to the investor, would you do that business if you are the one?”