- To affect only 15% consumers
- Labour says no to hike
- SERAP heads to court
Power lines. Inset: President Bola Tinubu.
The Federal Government via the Nigerian Electricity Regulatory Commission (NERC) has announced an increase of 300 per cent electricity tariff for Band A consumers in the country.
The Vice Chairman of NERC, Musiliu Oseni, disclosed this in Abuja on yesterday.
Power distribution companies (DisCos) will be allowed to raise electricity prices to N225 ($0.15) per kilowatt-hour from N68 for urban consumers this month effectively from April 1, 2024, Leadership Newspaper reports.
But Oseni disclosed that the rate increase will only affect 15 per cent of the electricity customers in the country.
According to the NERC boss, these customers, who represent 15 per cent of the population, also consume 40 per cent of the nation’s electricity.
The decision to raise the tariffs nearly threefold within weeks is part of Nigeria’s strategy to attract new investment into the energy sector and reduce the substantial $2.3 billion annual expenditure on electricity subsidies.
According to the platform, sources close to the presidency, familiar with the developments, revealed that these measures aim to make the energy market more financially sustainable and appealing to investors.
Also, the increase is necessitated by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recent announcement of an increase in the price of natural gas, which fuels over 70% of the country’s electricity generation.
The new 2024 base gas price has been set for power sector companies and commercial users, as stated by NMDPRA’s chief executive, Farouk Ahmed, marking a shift from the previous rate of $2.18 to $2.42 per one million British thermal units (MMBtu).
Since the privatization of its generation and distribution sectors in 2013, Nigeria has regulated electricity tariffs through the Nigeria Electricity Regulatory Commission (NERC).
However, The Nigeria Labour Congress (NLC) had warned the Federal Government against the implementation of the proposed 300 per cent hike in electricity tariff noting that it could plunge Nigerians into Further Hardship.
NLC cautioned that plunging Nigerians into more hardship amidst the current hunger and hike in food prices will be disastrous.
Labour posited that additional hike in electricity tariff despite the near-zero electricity supply at this critical time will not be a good decision.
The union noted that with Nigerians trying to survive as a result of the current economic realities requires a good government to think about addressing the immediate needs rather than embarking on an over 300 per cent hike in electricity tariff.
The NLC acting Deputy General Secretary, Comrade Ismail Bello who stated this in a chat with LEADERSHIP, reiterated the earlier call by Labour against privatisation of the sector.
According to him, “What is happening now is reconfirmation of what we told the general public and federal government during the privatisation period that privatisation was not the solution to the problem in the sector.
“During the clamour for the privatisation, we told the government the ill of privatisation but they went ahead against the wish of labour. We then warned the government that privatisation without good services will have effects on the populace,” Bello said.
He called on the government to have a rethink on the hike, saying its implementation will further add burden on the people that have been pushed to the walls.
The labour leader emphasised that the increment will further push more Nigerians into poverty.
“What Nigerians need most at this period is for the government to address the current economic realities rather than pushing them into more hardship with further hike in electricity tariff,” he said.
Meanwhile, Socio-Economic Rights and Accountability Project (SERAP), has announced plans to sue President Bola Ahmed Tinubu’ led administration over the increase in the price of electricity tariff.
Responding to the development, SERAP, in a post via its official X account, asked the President Tinubu-led government to reverse the ‘unlawful’ tariff increase.
The group urged Tinubu’s government to reverse the increase pending the hearing of the suit it instituted against the increase.
“The group wrote, “We’re suing the Tinubu administration over the arbitrary increase in electricity tariff from N66 to N225 despite the difficult economic realities in the country, and the pending lawsuit on the matter.
“The Tinubu administration must reverse the apparently unlawful increase in electricity tariff from N66 to N225 pending the hearing and determination of the suit we filed on the matter, to protect the integrity of the judicial process and the rule of law.”
