The Nation

IBEDC justifies electricity tariff increase


By Yinka Adeniran, Ibadan

The Chief Operating Officer (COO), Ibadan Electricity Distribution Company (IBEDC), Engr. John Ayodele has said that the recent increase in electricity tariff is a product of necessity to help distribution companies recoup outstanding debts to keep the sector afloat.

He appealed to customers who he said have not been helping the company by not paying for electricity to be more supportive in complementing the efforts of the company to improve service delivery.

He made the disclosure during an interview with newsmen in Ibadan following the displeasure that greeted the announcement of the increase in electricity tariff by Nigerians.

According to Ayodele, electricity companies have run into about N3.5 billion market shortfall monthly, adding that they also recorded N27 billion shortfall from January till date.

Justifying the increase, the IBEDC COO said it became imperative in view of government decision not to take responsibility for the shortfall, adding the new hike is a government decision to be followed and implemented by the electricity companies.

He said, “DISCOS are unable to recover monies, they are unable to settle their debts, so that was compounding the problem of the sector.

“As we speak today, we are trying to readjust. What is tariff shortfall, what is market shortfall? Market shortfall is money that we are billed but we cannot pay. For example today, almost every month, we run into almost about N3 to N3.5 billion market shortfall.

“In fact, this year’s own is almost N27 billion, for this year alone, so you can imagine by the time we get to December, we are talking about N30 to N35 billion as shortfall.

“When you look at those market shortfalls over time, as of December last year 2019, we were in a shortfall of N243 billion is what this industry is owing the sector. So N243 billion debt is there.

“Can I take that one to the bank to seek for investment fund? If you can’t borrow money, you cannot find money to invest.

“On the other side of it is the tariff shortfall, for government not allowing us to charge the adequate tariff. That one is another huge amount of money.

“So the government can no longer take responsibility for that shortfall and government has made it very clear there’s no way they can continue to sponsor that pay. That is the reason for the increase. At this point in time, the government has taken a decision and we are about to abide by the decision. That is why we are where we are.”


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