NERC yet to give go-ahead on 40% electricity tariff hike

THE Nigerian Electricity Regulatory Commission (NERC) is yet to give official approval to a projected 40 per cent electricity tariff increment by the electricity distribution companies (DisCos).

Several news media had been awash with unconfirmed reports that the 11 DisCos would be effecting the increment from Saturday, July 1.

Although the NERC multi-year-tariff-order (MYTO) allows tariff review every six months while considering key variables like exchange rate, inflation and gas pricing, the regulator has not officially issued any directive on any tariff hike.

The projected tariff for July 2023 was expected to remove subsidy and increase the previously frozen tariff bands D and E, increasing the bands from N54.59/kilowatt to N62.16 for band D, and N48.37/kilowatt to N61.16 on average, with an average increase across the bands moving to N67/kilowatt.

Energy experts projected that inflation induced by the floating of the naira and fuel subsidy removal would spike the new average tariff to about N88/kilowatt for the energy sector to recover operational costs.

Over the past week, several media outlets had published the expected 40 per cent rise in tariff, following the MYTO order, in line with the half-yearly review.

Considering Nigeria’s fluctuating exchange rate occasioned by Federal government’s rates unification and double-digit inflation at 22.22 per cent, some analysts say it may be difficult not to hike the tariff in the next July 1 review window.

When contacted, a spokesperson of NERC, Mike Faloseyi, confirmed: “there is no official statement from NERC on the increment.”

The viral rumour about the tariff hike generated condemnations, with the organised private sector, particularly manufacturers, raising concerns on its effects on ease of doing business.

For instance, the Director-General of MAN, Segun Ajayi-Kadir, said in a statement that manufacturers spent, at least N144.5 billion on sourcing alternative energy in 2022, up from N77.22 billion in 2021, which translated to about 87 per cent increase in the cost of access to alternative energy sources by manufacturers within a year.

According to Ajayi-Kadir, electricity tariff had been increased in the last eight years by 186 per cent, which had posed a huge burden to manufacturing.

The statement noted that the fact that the government itself was owed N75 billion in unpaid electricity bills was indicative of how burdensome the cost of electricity had become.

The MAN chief mentioned that the absence of stable, effective and fairly priced electricity supply in Nigeria had been a long-standing challenge for manufacturers, adding that the worrisome development had compelled many manufacturing companies to supplement the unreliable electricity supply with alternative energy sources.

Amid the worries trailing the proposed tariff hike rumour, the Abuja Electricity Distribution Company (AEDC) yesterday, Monday, 26, announced to its franchise customers to disregard the communication circulating in the media regarding the review of the electricity tariff.






     

     

    “Be informed that no approval for such increment has been received,” the AEDC stated in a statement signed by the management.

    Similarly, the Ikeja DisCo has also called on its customers to disregard the tariff increment report.

    Assuring its customers of no such plan, the DisCo described the report as “fake news.”

    The statement on the Ikeja DisCo’s website read, “Public Notice: Avoid Fake News. Dear Esteemed Customer, if the information is not from, or is not on any of our social media handles, then it is not true.”

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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