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Why electricity tariff was increased- IBEDC COO

Akinwande Soji-Ojo by Akinwande Soji-Ojo
September 25, 2020
in News
Reading Time: 2 min
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IBEDC begins implementation of new electricity tariff review July 1
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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 assist distribution companies in keeping the sector afloat.


Addressing newsmen in Ibadan on Friday over the displeasure that greeted the announcement of the increase in electricity tariff by Nigerians, Ayodele said electricity companies record  N3.5 billion market shortfall every month, adding that they have also recorded N27 billion market shortfall from January till date.

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


“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, we run into about N3 to N3.5 billion market shortfall almost every month.


“In fact, for this year alone, we have lost almost N27 billion. You can imagine by the time we get to December, we would be talking about N30 to N35 billion as shortfall.


“When you look at those market shortfalls over time, as of December 2019, we were in a shortfall of N243 billion.It 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, government is 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 is  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,” Ayodele said.


He appealed to customers who have not been paying for electricity to be more supportive in complementing the efforts of the companies in order to improve service delivery.

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