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Privatisation responsible for electricity tariff increase- Ajaero

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THE General Secretary of the National Union of Electrical Employees Joe Ajaero, has said that the privatisation of electrical distribution companies was responsible for the constant hike in electricity tariff in Nigeria.

Speaking in a video interview held on Friday, Ajaero bemoaned the insensitivity of the Nigerian Electricity Regulatory Commission (NERC) towards the plight of Nigerians, saying that there had been over five occasions of tariff increase with only a constant output of about 4000Watts.

Listing privatisation as the key factor informing tariff increase in electricity, he stated that there has been a decline in the electricity situation of Nigeria since the take-over.

Ajaero described tariff increase as the only business going on in the NERC, adding that the increase in tariff has not been matched by an increase in service.

Analysing the effect of an increase in electricity tariff, Ajaero said increment could cause inflation leading to yet another increase in the rates of electricity tariff.

“Each time they increase tariff, they create inflation. The same people that instigate inflation benefit from it. If there is tariff increase today, inflation will go high. So it continues to go in a cycle,” he said.

Increase in electricity tariff rates would continue if the system doesn’t change, he said, describing certain activities of the NERC such as the Service Reflective Tariff, as issues begging for reconciliation.

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On the increase in the prices of inputs required for the production of electricity in Nigeria, he said most of the inputs needed were not imported, and thus shouldn’t be quoted as a reason for the increase.

He noted that a reduction in the price of gas would likely lead to a reduction in the tariff rates, and that other options for the production of electricity such as coal and solar, should be explored, as 40per cent of the power generated all over the world was generated through coal.

Recall that the Nigerian power sector was partly privatised to establish competition, and improve the supply of power across the country. However, the generation capacity of the sector and its revenue has dropped drastically.

Five cases of tariff increase have been recorded, as earlier reported by The ICIR in January. There was a purported 50 per cent increase in electricity tariff, which NERC later denied, claiming that tariff rates had only been adjusted, and not increased.

Author profile

Ijeoma Opara is a journalist with The ICIR. Reach her via vopara@icirnigeria.org or @ije_le on Twitter.

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