Electricity Tariff Hike: Tinubu Under Pressure To Reverse NERC’s Decision

By Suleiman Tariff &Elizabeth Chukwuma

 Presidentt Bola Ahmed Tinubu, appears to be under intense pressure from the Organized Private Labour, OPS, Northern Elders Forum, Afenifere and the Opposition Labour Party, LP, to reverse the decision of the Nigerian Electricity Commission, NERC, under the close watch of   Musiliu Oseni, to increase Electricity Tariff for the Nigerian customers on Band A from N66.00 to N225 kilowatt per hour.

The  NERC, Chief Executive officer, CEO, had created the impression in the mind of Nigerians that the 20% increment in Electricity Tariff will not affect customers in other bands which was begging the question. Describing the Electricity Tariff  increase as a reckless move by the Tinubu’s Administration and complete  disregard  for the well-being  and welfare  of Nigerians,  the Northern Elders Forum had said that  that that Electricity Tariff increase  would have  ‘’a significant  negative impact  on the already  hungry Population struggling on a daily basis to survive’’. 

 Abdilazeez Suleiman, the NEF, spokesperson, who may have spoken the mind of members had said that the NERC drastic increase in   Electricity Tariff if not reversed by the Nigerian President without delay will further ‘’exacerbate the widening  between  the rich  and the poor in Nigeria’’.

 He was emphatic that the ‘’ill-conceived decision by NERC was not necessary for  now  because of the dire economic situation  faced by majority of Nigerians which has to with naira fluctuation  in the country’s Autonomous Foreign Exchange  Market, AFEM and the Parallel, popular, Black Market foreign exchange market and the removal of Premium Moor Spirit, PMS, popular , Petrol subsidy by the government on May 29, 2023., resulting in high cost of cost of goods and services due to the increase in transportation.

The NEF Leadership may have sent a message to Tinubu, who incidentally was a former Lagos state governor that   the Electricity Tariff hike   had come at  a wrong time  , noting that  under  the NERF new tariff plan , 24 hours of electricity  will cost the  consumer  a staggering  N5,400.00, or N162,000.00  monthly  and an astounding   sum of  N1,971,000.00 yearly.

NEF Leadership were said to have made it categorically clear to the President that the NERC, new Electricity hike   are simply’’ unaffordable by the majority of Nigerians still grappling with the harsh economic situation of the country’’. The Northern Elders may have shocked Nigerians when it stated that   ‘’instead of the eight month –old administration of Tinubu implementing policies that would alleviate the suffering of the people,’’ the government, has chosen to further exploit them’’.

Adelabu: minister Of Power, in support of electricity tariff hike

It noted that  the introduction of the Electricity Hike by NERC at he instance of  mi Adebayo Adelabu led ministry of Power which has the backing of President Tinubu  ‘’is not only unjust but a clear  indication  of the disconnect  between  the government and governed and a betrayal of the trust placed  in them’’.

Afenifere, the Yoruba socio-cultural Organization, which currently has two presidents, one faction led by Reuben Fasoranti, recognized by the Nigerian President and another faction led by Ayo Adebanjo, may have lent their voice to the call by NEF on the government to reverse the NERC, Electricity Tariff Hike without further delay. It could not be ascertained which faction had made the call. The Afenifere Group had made it clear to the President that asking Nigerians to pay for the new Electricity Tariff is’’ like paying for inefficiency and further compounding the country’s economic woes’’.

Fasoranti: Factional President of Afenifere

The Yoruba socio-cultural Organization had   decried the over 200% Electricity Tariff increase  , stating that  it will thwart  the current government’s effort at boosting  the economy  as businesses will collapse’’.  The Afenifere Leadership had alluded to the President’s speech   of the role which the private sector plays on the growth of the economy.  The Group had told the former Lagos state governor that ‘’if the private sector is not flourishing, there will be no growth, no prosperity, no employment and development in the country’’.

Appealing to President Tinubu  to  compel Adelabu,   the minister of Power, who had said that only 15% of Electricity consumers   in Nigeria which translates  to only  1.5 customers  would be affected by the Electricity Tariff Hike   to reverse it  and go into the  provision  of alternative sources of   energy supply  like solar and wind ,  which  it had described as more innovative, stressing that it is the only way  consumers will get the real  value  for whatever they pay for in Electricity Tariffs.

 The Organization would want the Nigerian government to first   ensure regular and efficient supply of electricity before approving NERC’s request to increase payment  for its service that are currently being poorly rendered across the country.

Afenifere had said that a rough calculation   going by the new Electricity Tariff indicated that an electricity consumer on Band A, who was initially paying an average of N50,000. 00  on a 68 Kilowatt per hour  would now be made to pay  N170,000.00 for the same poor service.

‘’  It is  noteworthy that  the Federal  ministry  of Power and its agency, NERC,  are more interested  in the revenue  that would be generated for the government  without  first ensuring   regular  and efficient supply of electricity in  the country’’, the Group had  said. 

The Afenifere Leadership would not take as an excuse the claims by the ministry of Power and NERC, officials,   that the  increase  in the cost of gas   was instrumental for the hike  in the country’s Electricity Tariff , noting  that ‘’the government agency are only passing  their own gross inefficiency  on the people   rather than exploring  ways to reduce  the cost  of producing energy  to further reduce the pains on Nigerians’’.

Ali: Head of Planing , Research and Strategy, NERC, attributes electricity tariff hike to the increase in price of gas and government’s decision to stop payment of electricity subsidy

Yusuf Ali, NERC, Commissioner for Planning, Research and Strategy, who had appeared on Channels Television recently had said actually that the biggest problem the Commission had faced in fixing the new electricity tariff  was ‘’the issue of gas price’’.  According to him, the gas price for the nation’s power sector is indexed to the US dollar.  He had said that in December 2022, when the tariff was first set, the gas price was set at $2.18 per one million British thermal units, MBTU, or N930.00 for every unit of gas.

 Ali, the  NERC, Commissioner, noted that as at today, the price of gas had been highly increased by 11%, by the Nigerian National Petroleum Corporation , now baptized Nigerian National Petroleum Company, NNPC , with the signing into Law of the Nigerian Petroleum Industry Bill  passed by the National Assembly by former President Muhammadu Buhari in August 2020, thus costing N3,500 for every unit of gas, the Commission  to make decision that would favour  the government, investors and the consumers being in the middle.

He had alluded to the letter written to the agency last July by the Licensees, which are the Distribution Companies, DisCos, that they would  want a new electricity tariff because the naira to the US dollar exchange rate has changed .

 As a prelude to the new  electricity tariff hike,  the NERC Commissioner for Planning, Research and Strategy had  revealed that   for a week  in whole of July , 2023, they held  rate case earnings  which is in line with’’ international best practices’’. He did not stop there. He further stated that they had invited some consumers to discuss the proposal by the DisCos.

He may have hit the nail on the head that agency was encouraged to hike the electricity tariff this week when the government declared that from this April, 2024, that it will no longer be willing to pay the subsidy on electricity, urging the NERC, to design a tariff regime with the distribution companies that would save the country N1.4 trillion currently spent on the subsidy. The fallout was the new electricity tariff that had been released by NERC, amidst criticisms by Nigerians.   

The Commissioner may have sent a message to consumers that there will still be another major review of the country’s electricity tariff in the next five years that will require stakeholders’ engagement to get input in determining the new tariff.

 He had said that there are three types of electricity tariff reviews that are carried out by the agency, noting that each of the reviews have different procedures to show how to go about them. Ali, the NERC, Commissioner had described what the agency had done this first week of April as minor electricity tariff revie. Another of such reviews was the month on month as it does not require any consultations with the consumers.     

 Notwithstanding the claims of NERC ,to justify the tariff hike on electricity, The Afenifere Group had said that there was no basis for NERC to latch on the increase on the cost of procurement of gas and the decision by the government to stop payment of electricity subsidy, to rush to increase Electricity tariff for Consumers labelled as Band A,   alluding to the report by Price Waterhouse Cooper, PWC, that had indicated   that ‘’harnessing the nation’s gas  proven gas reserves  can stimulate an estimated  Gross Value Added , GVA,  of the North American country of the United States , US, $18.3 billion annually to the economy.

At present,  the country’s gas production  is standing  at an average of 2.53  trillion cubic feet, meaning that what is being extracted   for proper utilization  is less than  one percent  of Nigeria’s reserves   and  where  what is used  by the country’s  power generating Companies to generate electricity bought by the distribution companies.

The Organised Labour , had said that the electricity tariff hike is ‘’ insensitive and unpopular’’  , warning that if the government is determined to go ahead with the collection of the new tariff ,  it should equally be prepared  for the consequences of that evil as they will mobilize workers on the streets to protest against the unpopular policy if  not dropped. 

Labour had made it clear to the government that there is no place in the world where high power tariffs have supported manufacturing, not even in the developed economies.  Benson Upah, Nigerian Labour Congress, Head of Information may have Nigerians to know that electricity tariff hike was the imagination of the minister of Power who have the audacity   to say that the policy will be implemented.

Upah  had said that the  Nigerian President and the minister are merely acting out  the script of the  World Bank and the IMF  which do not want Nigerians to enjoy any form of subsidy from the government as a way to save  money to grow the economy. They are the international Institutions driving this  highly dangerous policy, the NLC, Head of Information had said. ‘’This is going to hurt business  and further heat up the economy’’. Had further remarked.    

Leave a Reply

Your email address will not be published. Required fields are marked *