In a series of interviews with the News Agency of Nigeria (NAN) on Monday in Ibadan, stakeholders in the electricity sector voiced their concerns over the proposed increase in electricity tariff, stating that it would further burden Nigerians who are already grappling with the consequences of petrol subsidy removal.
Mr. Shadrack Akinbodunse, the Principal Partner of the Utilities Consumers’ Rights Advocacy Initiative, emphasized that the distribution companies (discos) had failed to demonstrate corresponding improvements to justify previous tariff hikes. He criticized the poor planning for expansion and the failure to timely replace obsolete equipment as contributing factors to the worsening power supply since the sector’s privatization.
Akinbodunse also highlighted the failure of the discos to fulfill their promise of mass meter deployment during privatization, resulting in the persistence of old and obsolete meters. This disregard for the Nigerian Electricity Regulatory Commission (NERC) order has left customers frustrated and disillusioned. He called for the discos to substantiate their current tariff structure and cease shortchanging Nigerians.
Furthermore, Akinbodunse revealed long-standing instances of cheating and extortion by electricity workers, particularly when power equipment develops faults in communities. He exposed how customers are often told that there are no provisions for repairs or replacements of faulty power equipment in the stores. He also criticized certain community development associations (CDAs) for exploiting power supply faults and taking advantage of new installations as a means of profiteering.
Supporting these concerns, Mr. Segun Ajayi-Kadir, the Director-General of the Manufacturers’ Association of Nigeria (MAN), explained that higher electricity tariffs would directly increase production costs for manufacturers. He cited power costs already accounting for 28 to 40 percent of the manufacturing industry’s cost structure. The proposed tariff hike would have a severe impact on metal processing, heavy machinery, and chemical manufacturing. Additionally, it would erode manufacturers’ profit margins, limit their expansion capabilities, and hinder job creation. Ajayi-Kadir warned that small and medium-scale enterprises (SMEs) were at risk of being paralyzed by the tariff hike, potentially leading to a decrease in government revenue. Ultimately, manufacturers would pass the additional costs onto consumers of their products.
Ajayi-Kadir called on the Federal Government and NERC to prioritize improvements in electricity generation, transmission, and distribution. He emphasized the need for regular electricity supply in the country, rather than increasing tariffs on the present inadequate 4000MW capacity. To ensure fair billing practices, he urged the government to meter at least 90 percent of electricity consumers, enabling consumption-reflective electricity bill payments.
Expressing the sentiments of average Nigerians, Mr. Kehinde Aina, a consumer, denounced the proposed hike in electricity tariff as untimely, considering the ongoing hardships caused by the removal of the petrol subsidy.
The Nigerian Electricity Regulatory Commission (NERC), in a recent public notice, explained that the request for rate review was motivated by the need to incorporate changes in macroeconomic parameters and other factors affecting quality service, operations, and sustainability of the electricity companies. NERC invited the general public to provide comments on the rate review applications made by the distribution licensees, as stipulated by Section 116(1) and 2(a and b) of the Electricity Act 2023 and other relevant rules.
As the discussion surrounding the proposed electricity tariff hike intensifies, Nigerians eagerly await the outcome of public opinion and the subsequent decisions made by the regulatory authorities.
Comments are closed.