Electricity generation companies (Gencos) in Nigeria are urging the Nigerian Electricity Regulatory Commission (NERC) to quickly review electricity tariffs following the Federal Government’s recent increase in the domestic base price of natural gas. They warn that delays could worsen financial strain and create disruptions across the power sector.
Joy Ogaji, CEO of the Association of Power Generation Companies, said the main concern is not the gas price itself, but the slow response in adjusting tariffs to reflect the new costs. She stressed that gas costs are a “pass-through” expense that should be transparently included in electricity bills.
“Whether the gas price rises to $10 or more, the issue is that NERC must factor the new base price into tariffs. If this gap isn’t acknowledged, it will create problems for both producers and consumers,” Ogaji said.
She added that the bigger challenge in the sector remains poor payment discipline. “Even when prices were low, many invoices went unpaid. Increasing tariffs won’t solve the problem if payments are still not made,” she said.
Ogaji also called for the establishment of “bankable demand” to boost investor confidence. She noted that with Nigeria’s population exceeding 200 million, the lack of clarity on who pays for electricity discourages new investment. She urged the government to take decisive measures, including emergency reforms if necessary.
Adetayo Adegbenle, Executive Director of PowerUp Nigeria, said the gas price increase will inevitably push electricity tariffs higher and raise subsidy needs. “Even if tariffs aren’t immediately adjusted, the higher costs from Gencos will be felt. The government needs a clear plan to manage this financial impact,” he said.
Meanwhile, Kunle Olubiyo, President of the Nigeria Consumer Protection Network, criticized the new gas pricing framework as inconsistent and lacking transparency. He pointed out inefficiencies in metering and billing that inflate electricity costs and said fixing these could reduce claims by Gencos by 40 to 50 percent.
Gas currently accounts for over 70% of Nigeria’s electricity generation mix, making it the largest cost in power production. The government’s latest price adjustment aims to encourage domestic supply, but experts warn that without tariff reforms, improved payment enforcement, and greater market transparency, the sector may continue to struggle.
