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Nigerians reject electricity tariff cut, demand total reversal

Nigerians on Monday rejected  the Nigerian Electricity Regulatory Commission’s reduction of the tariff payable by Band A customers from N225/kWh to N206.8/kWh.

The Nigeria Labour Congress, Trade Union Congress, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, electricity consumers and civil society organisations, in separate interviews with The PUNCH, demanded a reversal of the hike to the subsidy era tariff.

The new tariff announced on Monday came 33 days after the NERC raised the electricity tariff for Band A customers from N68/kWh to N225/kWh, representing about a 240 per cent increase.

Subsidy on electricity was withdrawn completely from the tariff of consumers in the Band A category, which constitutes about 15 per cent of the total 12.82 million power consumers across the country.

Based on the tariff hike, the Federal Government said it would save N1.5tn.

The government stated that the decision took effect from April 3, 2024, adding that Band A customers would enjoy up to 20 hours of power supply daily.

However, the House of Representatives, organised labour and the Nigerian Bar Association kicked against the hike in tariff payable by about 1.9 million consumers.

The House of Representatives called on the NERC to suspend forthwith the implementation of the new electricity tariff nationwide, while organised labour issued a two-week ultimatum demanding the reversal of the tariff hike.

Still, the Minister of Power, Adebayo Adelabu defended the increase during an investigative hearing held by the Senate Committee on Power last week, insisting that there would be a nationwide blackout in the next three months if the increase in electricity tariff was not implemented.

Notwithstanding the opposition to the new tariff order, the spokesman for the power ministry, Florence Eke, told The PUNCH on Sunday that the new tariff had come to stay and the government would not yield to public pressure.

However, 24 hours after Eke’s assertion that the tariff hike would not be reversed, the NERC in a statement announcing the eight per cent reduction for band A customers said this was a result of changes in macroeconomic indices in April, especially the appreciation of the naira against the dollar in the foreign exchange market.

The commission noted that the decision came after a thorough review of the macroeconomic parameters and exchange rate appreciations.

In response to the NERC’s order, the Abuja, Ikeja, and Ibadan electricity distribution companies among others, announced a reduction in their tariffs, accordingly.

Discos comply

The Ikeja Electricity Distribution Company in a notice said, “Dear esteemed customers, please be informed of the downward tariff review of our Band A feeders from N225/kWh to N206.80/kWh effective 6th May 2024 with guaranteed availability of 20-24hrs supply daily. The tariff for Bands B, C, D, and E remains unchanged”.

Also, the Ibadan DisCo informed its customers about the tariff slash, saying, “Customers using prepaid meters will be the first to experience the revised tariff – N206.80/kWh whenever they vend this month of May. While for post-paid customers, the revised tariff will reflect in the electricity bills to be received at the end of May 2024”.

Similarly, the Port Harcourt DisCo as well as its Eko, Abuja, Kano and Kaduna counterparts said they had all implemented the tariff slash to reflect the new order.

The NERC expressed its dedication to maintaining a regulatory environment that balances the interests of the consumers with the sustainability of the electricity supply industry.

It said the tariff reduction was part of its ongoing efforts to ensure that electricity remained affordable for Nigerians while also encouraging efficiency and improvement in service delivery by the distribution companies.

The statement read, “Under the tariff methodology adopted by the Nigerian Electricity Regulatory Commission, a revised tariff order covering the month of May 2024 has been issued by the commission to the 11 electricity distribution companies.

“The commission has considered changes in the macroeconomic parameters over the preceding month of April 2024 and especially the appreciation of exchange rates – consequently the commission has approved a downward review of end-user tariffs for Band “A” customers from NGN225/kWh to NGN206.8/kWh.

“The commission reaffirms its commitment to providing a balanced and effective regulatory regime serving the needs of the Nigerian Electricity Supply Industry.”

Speaking in an interview with The PUNCH, the NERC Public Affairs General Manager, Dr Usman Arabi, disclosed that the tariff cut was due to the recent rebound of the naira against the dollar at the foreign exchange market.

“The Band A tariff has been reduced from N225 to N206.80/kWh, and it is basically because of the exchange rate. The exchange rate has come down. It is just basically because of the exchange rate.

“You know, exchange rate, inflation and the price of gas are the micro indices for the determination of the tariff.  The exchange rate has come down, so the tariff also invariably came down,” Arabi stated.

Asked if the tariff will go up again if the naira falls against the dollar, Arabi expressed optimism, saying, “We are praying that the exchange rate would continue to come down. That is our prayer, and I am sure that is the prayer of everybody.”

Reacting to the development, the National Deputy President of the TUC, Tommy Etim, said, “It is unacceptable. All we want is a total reversal and stakeholders’ engagement.”Also commenting, the National Treasurer of the NLC, Hakeem Ambali, noted, “This is still a far cry from labour expectation; until there is a significant increase in power supply, any increment is unjustifiable.”

The President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture,   Dele Oye, argued that the Discos could not justify the recent tariff hike and, as such, needed to engage stakeholders on the matter to reverse it.

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