Engr. Abdu Bello Mohammed, Managing Director of the Nigerian Independent System Operator (NISO), has advocated the need for a careful, phased approach to implementing cost-reflective electricity tariffs in Nigeria.
He spoke in Abuja on Thursday, where he also suggested that such tariff reforms must be accompanied by tangible improvements in power service to avoid deepening the plight of vulnerable households already facing energy poverty.
According to him, tariff structures are central to the health of the power sector, adding that they determine not only the financial viability of power operators and investor confidence but also the affordability of electricity for millions of consumers.
He said the current challenges in the Nigerian Electricity Supply Industry (NESI), including liquidity deficits, inadequate investment, and poor service delivery—are largely rooted in tariffs that fail to reflect the true cost of power production and distribution.
He maintained that the prevailing issue is not whether to adopt cost-reflective tariffs, but how to do so fairly, ensuring that low-income Nigerians are shielded from excessive costs.
The NISO MD sought targeted support mechanisms such as lifeline tariffs and welfare-based rebates informed by data, designed to protect the most financially vulnerable consumers while maintaining market efficiency.
Nigeria must reduce technical and commercial losses within the system as an immediate strategy to alleviate tariff pressures,he said, noting that every percentage point of loss reduction translates to direct cost savings for consumers.
He explained that the development needs enhanced metering, automation, and accurate data management.
NISO, he disclosed, is leveraging advanced digital platforms and grid management technologies, including SCADA and Energy Management Systems, to improve system coordination and reliability.
