The Federal Government, on
Friday, insisted on the 240 per cent hike in tariff payable by power consumers
in the band ‘A’ category despite calls for its reversal.
It also revealed that the subsidised
power pricing regime would be for the short term, with a transition plan to
achieve a full cost-reflective tariff within a period of three years.
However, the decision did not
go down well with the Nigeria Labour Congress, which told the Federal
Government to prepare for the consequences of the tariff hike, which it
described as wicked and unpopular, stressing that since the government
preferred to listen to the World Bank and International Monetary Fund, it
should be ready to face the consequences.
The Head of Information, NLC,
Benson Upah, told one Saturday PUNCH, “We did say earlier that this tariff hike
is insensitive and unpopular. So if the government elects to continue with the
hike or persists in something that is evil, I’m sure it is equally prepared for
the consequences of that evil.
So, our leaders should be
prepared for the consequences of this highly injurious policy. That is what
I’ll say about this issue for now.”
Manufacturers and the organised
labour had kicked against the hike in tariff payable by about 1.9 million
consumers, which was approved and announced by the Federal Government on
Wednesday.
Subsidy on electricity was
withdrawn completely from the tariff of consumers on the band A category, which
constitute about 15 per cent of the total 12.82 million power consumers across
the country.
The government announced the
hike in electricity tariff at a press briefing in Abuja by NERC, adding that
those affected would pay N225 per kilowatt-hour, up from the previous rate of
N68/kWh, representing about 240 per cent increase.
The government stated that the
decision took effect on April 3, 2024.
But the Organised Private
Sector, NLC, and the Trade Union Congress kicked against the hike in tariff for
power users and demanded that the decision be reversed.
They argued that the hike in
tariff would send manufacturers out of business, worsen inflation and stifle
small and medium enterprises, adding that there was no place in Nigeria
currently enjoying up to 20 hours of power supply daily.
Band A power users are those
who get up to 20 hours supply of electricity daily.
At a press briefing in Abuja on
Friday, the Minister of Power, Adebayo Adelabu, insisted that the Federal
Government would continue with the new tariff regime for Band A consumers
despite calls for its reversal.
He said this was because the
government could no longer continue paying humongous sums as power subsidy,
stressing that subsidy on electricity for 2024 would cost the government about
N2.9tn.
The minister said, “We are in
the subsidy pricing regime, whereby the government provides a large portion of
the cost of producing, transmitting, and distributing power.
“I must tell you that as of
today, before the introduction of the tariff increase, the government is
subsidising nothing less than 67 per cent of the cost of producing,
transmitting and distributing electricity in Nigeria.
“At the current exchange rate,
this is going to translate into N2.9tn for 2024. This is more than 10 per cent
of the national budget. The power sector is just a single sector out of the
many sectors that the government has to attend to.”
Adelabu said other sectors and
ministries were competing for government funding and that “it will be very
insensitive on our part to force or compel the government to continue to
subsidise at the rate of almost N3tn for the power sector alone. We just have
to be realistic and considerate.”
He noted that by ending the
subsidy for band A customers, the government would save about N1.4tn, adding
that this fund would be channelled into the development of other sectors such
as health, education, works, etc.
The minister argued that the
tariff hike was pro-poor, as those affected were mainly residents who could
afford the cost, but noted that subsidy on electricity was only going to be for
the short term.
According to him, the Federal
Government plans to end the subsidy on power within three years, and the
withdrawal of subsidy from band A customers is just the pilot phase.
He said, “This tariff review
conforms with our policy thrust of maintaining a subsidised pricing regime in
the short run or the short term with a transition plan to achieve a full
cost-reflective tariff for over a period of, let us say three years.
“I have mentioned it in a
couple of media briefings that it is because of the government’s sensitivity to
the pains of our people that we will not make us migrate fully into a cost-
reflective tariff or remove subsidy 100 per cent in the power sector like it
was done in oil and gas sector.
“This is more like a pilot for
us at the Ministry of Power and our agencies. It is like a proof of concept
that those that have the infrastructure sufficient enough to deliver stable
power and enjoy 20 hours of light to be the ones to get tariff hike.”
Within two days of the tariff
hike, the Abuja Electricity Distribution Company Plc applied the new rate of
N225/kWh to all consumer bands under its franchise areas, contrary to the
directive that only those on band A should pay the new rate.
As a result, NERC slammed a
N200m fine on the firm for violating its Supplementary Order on the April 2024
Multi-Year Tariff Order.
On Friday, many customers of
the AEDC raised the alarm that they were not on band A but their bills had been
raised to N225/kWh, a development that made NERC to intervene.
For instance, a customer, who
simply identified himself as Mr Yakubu, said, “Interesting moment in Nigeria.
On Tuesday, April 2, 2024, I bought an electricity token of N9,900 and I got
135 units.
“Yesterday, April 4, 2024, I
wanted to confirm where NERC and AEDC social strata classification of
electricity consumption puts me, so I bought an electricity token of N9,900 and
I got 40 units. No supply of electricity throughout the night. Can I be
said to be enjoying band A, 20 hours supply?”
Reacting to the development in
a statement, the power sector regulator said, “The Nigerian Electricity
Regulatory Commission has taken enforcement action against the Abuja
Electricity Distribution Plc for non-compliance with the Supplementary Order to
the April 2024 Multi-Year Tariff Order 2024 for the AEDC.
“The AEDC has been fined ₦200,000,000 for failure to comply with the prescribed customer
band classifications for the tariff billing.
“This decision follows a
detailed review and customer feedback, which revealed that the AEDC had applied
the new tariff to all customer bands, contrary to the order, which was designed
to ensure fair billing practices.”
· Latest: Tinubu Signs Amended
Students Loan Bill Into Law
· Latest: EFCC Arrest Bobrisky For
Naira Abuse
· Gospel Singer, Nataniel Bassey Petitions IGP
Over Allegations He Fathered Mercy Chinwo’s Son
The commission stated that the
AEDC was therefore mandated to: “a. Reimburse all customers in bands B, C, D
and E, respectively, who were billed above the allowed customer
categories/tariff bands provided in the order.
“b. Reimburse through the
provision of the balance of customer tokens that the affected customers would
be entitled to receive at the applicable rates and all token reimbursements
shall be issued to the affected customers by April 11, 2024.
“c. Pay the sum of
N200,000,000.00 as a fine for the flagrant breach of the commission’s order. d.
File evidence of compliance with the directives in a and c with the commission
by April 12, 2024.
Atiku condemns hike
The 2023 presidential candidate
of the Peoples Democratic Party, Atiku Abubakar, has warned the Federal
Government that Nigerians will suffer more with an increase in electricity
tariffs.
Atikun said in a statement he
personally signed on Friday that the increase in electricity tariffs would
exacerbate the citizens’ hardships, particularly as inflationary pressures were
on the rise.
The statement read in part “As
usual, the government is unleashing another dose of reforms without adequate
notice and without an adequate post-reform plan to mitigate the pain.
“The increase in electricity
tariff comes at a time when Nigerian citizens are going through excruciating
difficulties occasioned by the withdrawal of subsidy on PMS and floating of the
domestic currency.
“The government has not
successfully dealt with the pains associated with the implementation of those
measures, and now this. The hike in electricity tariff will create more
difficulties for the citizens as inflationary pressures are elevated. Our
manufacturing sector will similarly be impacted negatively. Not only are they
paying higher interest rates on their bank loans, but also paying more for
diesel, and paying higher wages as a result of the new minimum wage. The
President’s men are pushing the economy into a deeper crisis. His reforms are
without a human face.
“It is important that we
understand the root cause of the inefficiencies in the power sector before
unleashing another dose of reforms. It is time to revisit the privatisation
exercise that produced the Discos.
“Tinubu must (a) ensure
that these reforms are sequenced, (b) implement measures to
Lawmakers
fault hike
The Minority Caucus of the
House of Representatives called on the Federal Government to prevail on NERC to
cancel the recent increment in electricity tariff across the country.
In a statement issued in Abuja
on Friday, the Minority Leader of the House, Kingsley Chinda, described the
hike as inhuman and evil for placing an unbearable burden on the already
strained populace, thereby exacerbating economic hardships and widening the
chasm of inequality.
The statement read in part, “We
urge Mr President, Bola Tinubu to prevail on the electricity regulator, NERC,
to rescind this decision and prioritise the welfare of the people.
“Transparent dialogue and
inclusive decision-making processes are imperative to address the root causes
of the energy sector’s inefficiencies and ensure sustainable solutions that
benefit all stakeholders and not consistent and persistent increase in tariff.
“We call for increased
accountability and transparency in the management of resources within the
electricity sector. Citizens have the right to demand efficient service
delivery and fair pricing mechanisms that align with their economic realities.”
Groups react
The Chairman of the South-South
United Action for Democracy and the Rivers State Civil Society Organisations,
Georgewill Enefaa, and a former President of the Joint Health Sector Union,
Obinna Ogbonna, criticised the electricity tariff increase.
Enefaa said it was bad for the
government to allow the increase in electricity tariff amid the economic
situation of the country.
He said, “This present
administration represents capitalism, which is only interested in profits. By
its design, it is not interested in the welfare of the people, just profits.
It is quite pathetic and it is
a height of insensitivity to the government that cannot provide other sources
of energy like petroleum.
“This is a time when production
is dropping in the country and they decided to increase one of the significant
means of production, which is electricity. It is wickedness, to say the least,
and barbaric. The easiest explanation is that this administration is interested
in tapping the last straw of blood from the veins of Nigerians.”
Ogbonna criticized the tariff
increase, saying the move was coming at a period when Nigerians were still
struggling with the removal of fuel subsidy and its effects.
He added that it appeared as if
the Federal Government was doing trial and error with the economy, and advised
President Bola Tinubu and his economic team to find a direct pattern of fixing
the economy.
The President, Nigeria
Automobile Technicians Association, Magaji Sani, said the increase would have
grievous implications for members of the body.
According to him, the Federal
Government should concentrate on delivering stable electricity to Nigerians
before considering an increase in tariff.
He said, “The implication of
this hike in electricity tariff will be grievous. Firstly, electricity is not
available. People are just managing the little they see and augment it with
generators. Instead of fixing the electricity supply first, they are talking
about increasing tariffs. If you want to sell something, you must have it in
good quality.
“There is a hardship because
everything in the country is now very expensive. People have yet to recover
from the current inflation, and here you are increasing the electricity bill.
It is very unfortunate. The people voted in the government; it is wrong for the
same government to make life difficult for the people. We are calling on the
government to reverse the increase.”
Send your articles for publication to our
email, estheroyeyemiassociates@gmail.com
