Electricity rates in Nigeria are expected to rise sharply later this year after the oil minister announced that the price of gas for power generation will go up fivefold.
Diezani Allison-Maduike said in a statement that the price of gas for power generation will increase from the current 20 cents per one million metric British thermal units to to one dollar by the end of this year.
The price would rise further to two dollars by the end of 2013 while further increases would be determined by inflation beyond 2014, she added.
She insisted that the hike was necessary to support investment in the gas industry.
Nigeria’s 150 million people are set to bear the brunt of the increase as the state power agency consumes 75 percent of the domestic gas supply to generate electricity.
The country currently produces just below 3,000 megawatts of electricity, less than half of last year’s targeted figure of 6,000 and far below the needs of its large population.
South Africa, another continental powerhouse, produces more than 43,000 megawatts of electricity for a population a third the size of Nigeria.
Corruption, inefficiency, dilapidated equipment and particularly attacks on gas and oil pipelines by militants in the Niger Delta have badly affected power generation and distribution in recent years.