By Babs Oyetoro, Francis Ajuonuma and Linus Aleke
Amid biting economic crunch, the Federal Government yesterday approved the increment of electricity tariff for Band ‘A’ customers.
Band ‘A’ are those who enjoy electricity supply for 20 hours per day.
The development has, however, sparked criticisms as consumers have kicked against it, saying it will further worsen the harsh economic condition in the country.
Speaking at a press briefing in Abuja yesterday, Vice Chairman of the Nigerian Electricity Regulatory Commission (NERC), Musliu Oseni, said the increase will see customers pay N225 kilowatts per hour, up from the current N66.
He said these set of customers represents 15 per cent of the 12 million electricity customers nationwide.
Oseni added that the commission had also downgraded some customers from Band A to Band B due to non-fulfilment of the required hours of electricity provided by the electricity distribution company.
He said, “We currently have 800 feeders that are categorised as Band A, but it will now be reduced to under 500. This means that 17 per cent now qualify as Band-A feeders. These feeders only service 15 per cent of total electricity customers connected to the feeders.
“The commission has issued an order which is titled April supplementary order and the commission allows a 235 kilowatt per hour.”
Oseni explained that the review will not affect customers on the other Bands.
Bloomberg on Tuesday reported that power companies will be allowed to raise electricity prices to N200 ($0.15) per kilowatt-hour from N68 for urban consumers.
It quoted people in the presidency with knowledge of the matter saying this was in a bid to attract new investment and slash about $2.3bn spent to cap tariffs (subsidies).
According to the news agency, “Nigerians will now have to pay $2.42 per one million British thermal units from the previous rate of $2.18 MMBtu.”
The increase follows Monday’s announcement by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of an increase in the price of natural gas to power.
*Nigerians lament further hardship new rate will inflict on homes, businesses
However, the tariff increment has stirred the hornets’ nest as consumers, including a former Kaduna Senator, Shehu Sani, residents, university don, and entrepreneurs have faulted the decision.
‘Let Nigerians breathe, we can’t add this to current hardship’
The immediate-past President of the Lekki Estate Residents and Stakeholders Association, Olorogun James Emadoye, bemoaned the approval of the hike in electricity tariff by the Federal Government.
Already, Emadoye noted, Nigerians were grappling with the harsh economic situation in the country which has caused hardship across all sectors, adding that the hike in tariff would further worsen the tense living conditions.
He also said with the increase, the President did not mean it from his heart when he said “Let Nigerians breathe.”
Emadoye said, “I do not know what the government of the day is thinking. The economy is already in bad shape and the President has said severally that we should let the people breathe. I will be shocked if the electricity tariff is increased by even 50 per cent, let alone 300 per cent. If this is true, it means the President truly does not want the people to breathe.
“This electricity that they have just increased is even not available to the consumers and one would expect that by now they should go into serious auditing and investigation of the DisCos and the GenCos because over the years the government has granted them so many resources for which they have not accounted for it.
“As far as we are concerned, they are not investing. Recall that for over 15 years, we have been talking about 3,000 or 5,000 megawatts of electricity generated, what has been happening to the huge money sunk into the sector?
“We expect the government to first unearth what is happening in the sector instead of approving the increase in tariff. Even the current tariff is not easy for Nigerians to pay. If electricity is available, it should be at the right price. Increasing electricity by almost 300 per cent is like killing a child that is already almost dead. Let Nigerians breathe.”
*300% increase extremely high- CPPE
Similarly, the Chief Executive Officer (CEO), Centre for Promotion of Private Enterprise (CPPE) Muda Yusuf, described as outrageous the hike in electricity tariff as.
Yusuf, who did not condemn the hike in its entirety, said the increase in tariff should have been done a lot more gradually to improve the level of efficiency in the sector.
“I think the increase is too high in my view. We’re talking about close to 300 per cent, that’s extremely high. I think if we are going to increase I think it should have been a lot more gradual.
“Secondly, I think it’s necessary to ensure that we improve the level of efficiency in the electricity sector generally so that a lot of inefficiencies that are also contributing to the cost; because when the complaint about cost reflective tariff, they need to interrogate the elements of that cost because we know that many of them particularly the DisCos; they have issues with technical losses, they have issues with financial losses and they have issues with a lot of inefficiencies that are contributing to the increase in cost, that element has not been properly dealt with.”
He insisted that it has become very imperative to address the issue of metering and the huge exploitation happening through the estimate billing system.
“The issue of metering is very important, you know because there is a lot of exploitation happening through this estimated billing that is still a problem that needs to be addressed.
“Then the decentralisation of the electricity system which the government has approved we need to use physical policy to sanctify it so that all of us are not depending on this so-called national grid that is important,” he added.
The CPPE boss, however, called for continuous reforms in the power sector to eliminate inefficiency in the system which has greatly held the sector back.
He said, “The advice is that we should continuously reform the power sector. We need to ensure that everybody has metre, they should be metered. The inefficiencies in the system need to be removed because inefficiency is also contributing cost of operation which they are now factoring into this tax. This inefficiency should be removed and we should centralise the system.
“We should also fast-track the issue of energy needs; all of us cannot be depending on this national grid or all these Discos you know. These are some of the things we need to do.”
*Increase will electrocute human lives and businesses- Shehu Sani
Also reacting to the development, Senator Shehu Sani fumed in a post on his X handle (former Twitter), by saying, “Increasing electricity tariffs by 300% will finally electrocute human lives and businesses in the country.”
*Poor masses will still bear the brunt, says varsity don, Fatokin
Commenting on this development, Anchor University, Prof Johnson Fatoki, expressed fears that this development may compound the problems of the masses, who are still battling with the economic crunch even as he faulted the timing of the increment.
“They have increased the tariff before now. They wanted to make known to the public now. Honestly, they are making things difficult for the common man,” he said.
For instance, if an industry falls within the category of Band A, then such industry cost of production will surely rise astronomically then the brunt will be passed to the consumers.
“If an institution is on this dedicated line, then it will affect the cost of running the school. At the end of the day, such a school may be forced to increase its school fees.
“Besides, the timing is not ideal because Nigerians all over the country are bearing the brunt of subsidy removal. I think the government should have waited for the time when the economy started taking shape to implement this new tariff.
“The eminent scholar reasoned that the ideal thing to do is to metre every consumer of energy, saying that the individual will determine what volume of energy he wants to consume in a day.
“I may have light for 20 hours but may decide to use light for only 10 hours in a day. That will be the ideal thing to do. The distribution company should not make it selective increase but rather provide metre to every consumer”, he explained.
