Electricity Tariff: Crisis Looms as Deadline for Increment Causes Panic

Electricity Tariff: Crisis Looms as Deadline for Increment Causes Panic

  • Electricity consumers in Nigeria have expressed their fears as the deadline for the tariff increment approaches
  • There have been reports that electricity distribution companies plan to introduce a new tariff rate in July
  • Some Nigerians decry that the move is coming at a time a lot of people are struggling to cope with the harsh realities created by the fuel subsidy removal

FCT, Abuja - The alleged deadline for the increment in electricity tariff has continued to generate severe tension across the country as the date for the commencement of the new tariff regime draws close.

Reports have emerged that the government and the Nigerian Electricity Distribution Companies (DisCos) have settled for a 40% tariff increment.

New electricity tariff/ Electricity tariff increases/ Tension as electricity tariff increases/ Electricity tariff deadline
Tension spreads as new electricity tariff deadline approaches. Photo Credit: Transmission Company of Nigeria
Source: Facebook

In a circulated statement allegedly from the Abuja Electricity Distribution Company (AEDC), customers on bands B and C, with 12 hours supply to 16 per day, are expected to pay N100 per kWh while Bands A with 20 hours and above and B (16 to 20 hours) will pay higher compared to now.

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Electricity tariff worsening subsidy removal crisis

The increment is coming when Nigerians are struggling with the effect of fuel subsidy removal.

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Recently, the Nigerian National Petroleum Company Ltd, NNPCL, increased the pump price of Premium Motor Spirit, PMS, also known as petrol, to N537/N550 per litre.

Since the new price regime, Nigerians have been struggling to cope with the harsh realities created by the new policy. While many have cut down their fuel use, others have permanently parked their vehicles at home.

Andrew Otene, who works with one of the ministries located in the Central Business District, Abuja, said he would be spending N36,000 weekly if he continues using his vehicle to get to work.

Andrew said:

"Multiply 36k by 4. This will amount to 144k monthly. How much is my salary? What this means is that I'm working for fuel and not to help myself and my family."

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While people are still trying to adjust to the new price regime regarding petrol, the planned increment in electricity tariff, which is to commence on July 1, has become a significant source of worry.

Electricity tariff is a response to forex harmonisation

Even though the Abuja DisCos is yet to make a clear statement, many believe the planned increment is an immediate response to harmonising the official and unofficial exchange rates.

A statement purportedly from the Abuja Electricity Distribution Company, AEDC, about why tariff increment was imperative says:

"Under the MYTO 2022 guidelines, the previously set exchange rate of N441/$1 may now be revised to approximately N750/$1, which will have an impact on the tariffs associated with your electricity consumption."

The statement went further to charge customers to take advantage of the information by buying electricity units in bulk to avoid paying so much at the take-off of the new tariff regime.

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But AEDC quickly dismissed its statement, urging customers to ignore its earlier notice as no approval had been given yet on tariff increment.

Despite the denial, the AEDC's first statement confirmed another statement earlier issued by Ikeja Electric which said:

"Electricity units are set to jump by 30-40% in just over a week. You are best advised to buy as many units as you can before July 1."

Nigerians, rights group protest

As Nigerians remain unsure of what DisCos may do as on July 1, electricity consumers have remained apprehensive, with some lamenting that it will amount to robbing Peter to pay Paul.

Majority of those Legit.ng interacted with said a tariff increment for electricity will further complicate the current surge in the country's inflation.

Recall that the Nigerian Labour Congress (NLC) had warned against a tariff increment, advising the government and DisCos to tread cautiously.

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The NLC warned that the Nigerian Electricity Regulato­ry Commission (NERC)'s plan was insensitive, callous and a reflection of a lack of care for consumers, especially people experiencing poverty.

Comrade Joe Ajaero, the NLC President, told Daily Independent that one of the risks is that the ordinary Nigerian will bear the brunt.

According to him:

"By the time other products or service-rendering enti­ties come up with their new prices or rates, the ordinary person would have been com­pacted into dust."

Onwubiko makes strong point

Similarly, Emmanuel Onwubiko of the Human Rights Writers Association of Nigeria, HURIWA, said the plan was another form of insanity.

Speaking exclusively with Legit.ng, Onwubiko said the decision was the highest form of insanity, arguing that it was the same as removing subsidy from electricity but would not stop the government from advancing credit facilities to DisCos.

Onwubiko said:

"For the government to plan to hike electricity costs, it means that even the little subsidy provided for the benefit of the people would be taken away. And when you take it away and you hike the cost of electricity, it still does not stop the government from advancing credit facilities to these so-called DisCos.

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"People who run DisCos are not running the business as if it's their own that they are finding 100 per cent. The government is still funding them. So is the government planning to stop giving them a penny? Have they (PPS) paid back all the money that Nigeria has given to them that they have been using to run DisCos since the partial privatization of the power sector? Have they paid the money they are owing the banks? Some banks have taken over the ownership of these DisCos alongside their cronies. So what is the need for telling us that you want to make people pay higher and even if you have stopped giving them the credit facilities you used to give them, what about the ones you gave them earlier that they refused to pay?
"So what the hurry to remove electricity subsidy when you have already removed subsidy from petrol? People are paying through their noses to travel from one point to another. Now you want to remove subsidies from the small amount of electricity they get. The people that have access to electricity are not more them 40 per cent of Nigerians. And even the 40 per cent connected to the national grid don't get electricity 24/7. It doesn't make any sense. They should allow the poor people to breathe. We have already issued a statement on this."

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Updated: Discos alert Nigerians on electricity tariff increase from July 1, advice on saving cost

As July 1 draws near, many Nigerians have continued to engage in the panic purchase of electricity units so as to push forward the expected effect of a tariff increment.

But some are not bothered, saying they cannot buy electricity in bulk when they lack the financial capacity to do so, especially now that they are struggling to cope with the current economic hardships.

Legit.ng observes that a tariff rise is likely to cause a serious national crisis as the decision is coming just when Nigerians are struggling with the current unfortunate realities caused by the recent removal of subsidy from Premium Motor Spirit, PMS, also known as petrol.

FG set to implement new tariff rate in July as Nigerians pay over N247bn for electricity in 3 months

Meanwhile, Legit.ng reported that the National Bureau of Statistics has revealed that in the first three months of 2023 (January to March), Nigerians paid N247.33 billion for electricity to 11 distribution companies (DisCos).

The bureau stated this in its Electricity Report for Q1 2023, released on its website and obtained by Legit.ng.

Source: Legit.ng

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Adoyi Ali Ali Adoyi is a prolific writer and a graduate of the Benue State University, Makurdi, Benue State. Adoyi holds a B.A Theatre and Communications Arts. He has bagged many awards both in academics and in journalism. Some of the awards are 10 years Journalism Merit Award, Best graduating student (Dept) Most Outstanding student (Faculty), and others. Adoyi can be reached here: adoyi.ali@corp.legit.ng

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Adekunle Dada (Politics and Current Affairs Editor) Adekunle Dada is a journalist with over 5 years of working experience in the media. He has worked with PM News, The Sun and Within Nigeria before joining Legit.ng as a Politics/Current Affairs Editor. He holds a B.Sc. in Mass Communication from Lagos State University (LASU). He can be reached via adekunle.dada@corp.legit.ng.

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