An energy expert, Dr Damola Omole, Head, Power and Energy Strategy, Dangote Industries, says increasing electricity tariff will not solve the the problems bedevilling the power sector in Nigeria.
Omole made the assertion on Wednesday at the ongoing Power Nigeria Agenda Exhibition organised by Informa markets in Lagos.
Omole said increasing the tariff would only amount to funding inefficiency, adding that the Federal Government should intensify efforts to encourage more players to invest in the sector.
He said the government should dilute the Distribution Companies to minority stake and thereafter sell its major stake to more credible players.
According to him, consumers should be metered before effecting tariff increases as estimated billing is generally unfair.
Omole also urged the government to look into the issue of supply and cost of gas to the thermal power plants in order to reduce the over N7.5 trillion lost annually to irregular power supply.
He noted the country's manufacturing sector was worst hit by the irregular supply with about 17 million small and medium scale businesses spending over N2 trillion annually in running generating sets.
Omole said: "Manufacturers only get seven hours of supply on average with the balance of over two-third self sourced.
"Grid supply should be 20,000MW for manufacturing sector to thrive but supply is currently less than 4,000MW.
"Grid power supply is irregular and unpredictable for manufacturing processes."
He explained that electricity consumed through alternative means cost N78 per kilowatt while supply from the grid was at N32 per kilowatt , thus increasing the cost of production for manufacturers.
According to him, the ripple effects of power shortages include reduced production, job losses, outright closure of factories or relocation to other African countries.
Omole noted that the power sector reforms had failed to yield the desired result due to the failure of the generating companies,the transmission company and the distribution companies to align for a common purpose.
He said the lack of synergy between the layers in the energy value chain had resulted in over 2,000MW of electricity not been supplied to the end users by the distribution companies.
Omole also decried the lack of industrial clusters across the country which would have been of great benefit to Nigeria manufacturers and enable them compete with their contemporaries outside the country.
On his part, Mr Gareth Rapley , Group Exhibition Director, Informa market, said the exhibition which had over 130 local and international exhibitors was put in place to find solutions to the challenges facing the power sector in Nigeria.
Rapley noted that the energy problem was not peculiar to Nigeria and could be overcome with collaboration between the government and the private sector.
He said the conference therefore was an opportunity for players in the energy sector to dialogue and exchange ideas on how best to address the issues confronting the sector.
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