Electricity consumers and experts have expressed resentment at the latest plan to increase the electricity tariff.
They opposed the tariff hike, saying it is “ill-timed” and would be done in utter disdain to the challenges confronting Nigerians. The Nigerian Electricity Regulatory Commission (NERC) had on Monday announced on its website that it was concluding the “Extraordinary Tariff Review” for the eleven electricity distribution companies (DisCOs) in the country.
In the notice served to the general public, the regulator of the power sector said the review was pursuant to the provisions of the Electric Power Sector Reform Act (EPSRA). NERC explained that extraordinary tariff reviews are carried out in instances where industry parameters have changed from those used in the operating tariffs to such an extent that a review is urgently required to maintain the viability of the industry.
It added that the review would put into consideration changes in inflation, foreign exchange, gas prices and available generation capacity. The commission said it would also commence the processes for the July 2021 Minor Review of the Multi-Year Tariff Order (MYTO-2020), which is done every six months.
But condemning the planned hike in electricity tariff, consumers under the aegis of the Nigerian Consumers Protection Network (NCPN) urged the commission to back down on any plan to do the review, describing it as ill-timed.
In an open letter signed by its president, Mr Kola Olubiyo, and addressed to the chairman of NERC, the NCPN said, “The timing of another increase in Electricity Tariff in Nigeria is ill-advised and therefore unacceptable to electricity consumers in Nigeria. “We had expected that the Regulator would have allowed the impact of the January 2021 Major Tariff Increase to settle down first. The 1st September, 2020 Major Review which was given effect in January translating to between 120% – 200% increase in some places is yet to go down. In several homes, offices, business outlets, hotels, etc,
Nigerians have stopped using Air Conditioners, Micro Waves, Water Heater and basic household equipment that are taken for granted in other climes. The government needs to listen to us as end-users.”
Also speaking with LEADERSHIP, an expert who worked with defunct Power Holding Company of Nigeria (PHCN), Engr Ewetumo Magboro said talking of another review barely three months after a review that sparked a lot of protest across the land is quite ill-timed and miscalculated by the authorities.
He said instead, emphasis should now be on getting the DisCos to be more focused on metering the people and resolving some of the problems that have resulted in their underperformance over the years.
He stated: “The problem is that we are not even out of the pandemic yet; economic activities have grounded and there is no money in the economy, and you are increasing the electricity bill. It is not right now to increase tariffs. That is number one.
“Secondly, last year August they brought up what they termed Service-based Tariff. There was a protest and it was suspended till December. Just three months into it we are talking about another increase.
“I think the right thing is to do an evaluation of the Service-based Tariff first to see whether we are gaining from it which to me there is nothing yet to show for. The reality is that at least before you do another review, it should have taken like one year for the people to come to terms with the previous changes”.
Engr Magboro noted that it was high time the Power Sector Reform Act which pegged minor review at every six months was revisited for the review to be extended to one year, now that it has become clear that it cannot work like that.
The special adviser to President Muhammadu Buhari on Critical Infrastructure, Ahmad Zakari, who also spoke to LEADERSHIP on the issue, however, explained the necessity of doing the review, saying many factors bordering on the tariff and the electricity market are changing fast, and to be able to overcome some of the current challenges in the sector such as liquidity, poor power supply, such a review has to be carried out. He recalled that during their meeting with organised labour recently, all parties consented to the period for review to be carried out. Zakari, who noted that the review being talked about was not meant to come into effect till January 2022, said NERC only decided to bring it up early.
He assured that the review would not automatically translate to a hike in the price of electricity for Nigerians. “Allowing the review does not mean all the financial burden automatically passes to the end-users. Government reserves the right to say I will subsidise for so and so as it is already doing,” he said.