What Nigerians should expect after hike in electricity tariff – Stakeholders

THE electricity tariff hike approved by the Nigerian Electricity Regulatory Commission (NERC) for customers enjoying a 20-hour power supply will come with some consequences, stakeholders in the sector have predicted.

The NERC’s vice-chairman, Musliu Oseni, announced the new tariff at a press briefing in Abuja on Wednesday, April 3.

The new tariff sees nearly 300 per cent jump from the old rate.

Oseni said the increase would not affect customers on other bands, adding that the new tariff had taken effect from April 1.

Those enjoying a 20-hour power supply are classified under service-reflective tariff by NERC as Band A customers.

Most industrial areas, highbrow estates, and residences are classified under Band A.

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This development has elicited reactions from consumers and industry stakeholders who described distribution companies’ failure to meet up with power supply as structured by supply-service reflective tariffs as unfair.

By computation, the Band A tariff customers enjoy 20 hours and above of electricity supply daily, Band B offers a minimum of 16 hours but less than 20 hours, Band C gives a minimum of 12 hours but less than 16 hours, Band D provides a minimum of eight hours but less than 12 hours, and Band E makes less than eight hours available to customers.

Commenting on the development, the chief technical officer of FGN (Federal Government of Nigeria) Power Company,  Idowu Oyebanjo, an engineer, said that if NERC increased power based on a regular supply of electricity, how would it monitor a customer who’s supposed to have 20 hours but gets less?

“It’s just for only a few people who are in band A. The only challenge I have is how to ensure that those customers get a 24-hour supply. How do you monitor that a customer who’s supposed to have 20 hours gets only five hours in a day? How do you make sure that he doesn’t pay for darkness?” he queried.

Since energy prices are major triggers for Nigeria’s inflation, there are also fears that industrial clusters categorised in Band A would increase the cost of goods with a hike in tariff.

“Industries might be tempted to increase the cost of goods, but I think that will be grossly unfair if 20 hours of supply will be guaranteed against the cost of diesel per litre,” an economic analyst, Habu Sadeik, said in reaction to the tariff hike.

Similarly, Secretary of the Network of Electricity Consumers, Uket Ubong, said the tariff hike for band A customers to ₦250/unit wouldn’t solve liquidity problems in the power sector.

“Tariff increase will never solve the liquidity crises. I have said it severally. It’s certainly not the silver bullet. Increasing the tariff to ₦1000/kWh will not solve the problem if the power distribution companies remain rent seekers/ collectors. What happened to the Performance Improvement Plan (PIP) signed by the power distribution companies with the NERC under the service-based reflective tariff? he asked.






     

     

    Nigeria’s power supply has been witnessing a serious downturn and grid collapses with several power-generating plants shutting down as a result of debt owed them by the Federal Government.

    The Minister of Power, Adebayo Adelabu, had faulted the gas pricing in dollars in December last year.

    Since January, gas companies have reduced their supply to power plants following years of unpaid invoices amounting to over $1.2 billion.

    The reduction has further worsened the nation’s epileptic power supply, which is yet to be addressed since the power plants supply about 75 per cent of the country’s grid power, and could threaten the power supply further if not properly addressed.

     

     

     

     

    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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