By Job Osazuwa
There seems to be confusion over the new tariff that electricity consumers across the country are to pay. Nigerians have been fed with diverse information by the regulatory body and distribution companies.
In what many people have tagged a New Year shocker, electricity consumers were informed in the first week of January that there was 50 per cent increase in electricity consumption tariff to be paid from January 1, 2021.
The announcement generated widespread condemnation. Many Nigerians, outraged by the development, have been expressing their anger and lambasting the government for the decision.
Expectedly, Nigerians were yet to come to terms with the last increase in electricity tariff in the dying months of 2020, when the Nigerian Electricity Regulatory Commission (NERC) again enforced a new Multi Year Tariff Order (MYTO), increasing electricity bill across the country.
A revised MYTO and minimum remittance threshold payable by the distribution companies and signed by NERC Chairman, Sanusi Garba empowers the 11 electricity distribution companies (DISCOs) to increase tariff by 50 per cent citing prevailing economic realities, especially inflation and exchange rate.
The document, dated December 30 2020, overruled the previous Order NERC/2028/2020. In the new order, NERC blamed the N2 to N4 adjustment in tariff on inflation and movement in foreign exchange rates.
After series of outrage and outright rejection by consumers who cited poor power supply and the impacts of COVID-19, DISCOs had in November last year started the implementation of a service-based reflective tariff (SRT) structure after backing by the Federal Government.
As gathered, all classes of consumers, except those who enjoy a few hours of power supply, would now pay more for electricity until June this year, while a Cost Reflective Tariff would be activated from July to December 2021.
In its reaction to reports of fresh increase in tariff, NERC quickly clarified that the hike would not affect customers being served less than an average of 12hrs of supply per day.
NERC’s spokesman, Michael Faloseyi, in a statement, said: “The commission hereby states unequivocally that no approval has been granted for 50 per cent tariff increase in the tariff order for DISCOs which took effect from January 1 2021.
“On the contrary, the tariff for customers on Service Bands D and E (customers being served less than an average of 12 hours of supply per day for a period of one month) remains frozen and subsidised in line with the policy direction of the Federal Government.
“In compliance with the Electric Power Sector Reforms Acts (EPRSA) and the nation’s tariff methodology for biannual review, the rates for Service Bands A, B, C, D and E have been adjusted by N2.00 to N4.00 per kWhr to reflect the partial impact of inflation and movement in foreign exchange rates.”
Faloseyi asked any customer that has been impacted by any rate increase beyond the above provision of the tariff to report to the commission at HYPERLINK “mailto:[email protected]” \t “_blank” [email protected]
Perturbed by the development, the Trade Union Congress (TUC), and other organised bodies have issued stern warnings, asking the Federal Government to revert to old electricity pricing or face the consequences of its action.
On November 1, 2020, power distribution companies commenced the implementation of the revised electricity tariff that was jointly agreed upon by organised labour and the Federal Government. Hence, many Nigerians believe that it was too early for the distribution companies to embark on another upward tariff review.
Meanwhile, some electricity consumers have said that their bills were too outrageous to be comprehended.
One of the angry Nigerians is Mr. Emmanuel Chukwudi, who said that he was given N26, 000 bill in the month of November 2020 for his three-bedroom flat in Festac Town in Lagos. He stated that he was pained because the number of hours he enjoyed power in the said month was far lesser than the previous months that he was paying between N12, 000 and N15, 000.
“I have never seen such a government. They will increase tariff but won’t improve on service delivery. This is the reason they have been foot-dragging in making prepaid metres available to every electricity consumer.
“I will not blame Nigerians who are doing everything possible to leave the country for a better life abroad. Nothing works here. Our governments, both past and present, have failed us. No reasonable government will increase tariff on a New Year Day. But that is what we get as punishment for being a Nigerian,” Chukwudi told the reporter on the telephone.
The TUC described the decision as ‘wicked’ and ‘another betrayal of trust’ coming in the middle of on-going negotiations by the Federal Government and the organised labour on the November 1, 2020 hike.
This was contained in a statement by the TUC President, Quadri Olaleye, and the Secretary-General, Musa Lawal, titled, “Electricity hike: Another betrayal of trust”, where they described the new tariff as a harsh policy. The congress wondered why the government espouses unfriendly policies that were capable of crippling the economy.
It said that many companies, which could not pay the previous tariff hikes, had either closed shop or relocated to neighbouring countries. It wondered if there was no other way the government can creatively generate revenue other than shifting the burden to the masses.
“There is so much deceit and laziness in the system; there is hardly any promise made that they have followed through. How can the government go-ahead with increase in tariffs again when we have not resolved the one done earlier? This is preposterous, ridiculous and sheer wickedness.
“Darkness enhances criminal activities and now they have chosen to keep us in darkness thinking their high fences will save them. We call on the government to be responsible for once.
“You don’t just churn out policies without weighing the pros and cons. How many people can afford to pay the last bill talk less of this recent one? The government must revert to the old price or be willing to accept the outcome of this decision.”
A cleric at a Pentecostal church in Lagos, Adepoju Olu, argued that the government ought to have thoroughly considered the social context of the decision against focusing on the economic argument.
“It is not a bad idea to increase tariff but what about service delivery that is commensurate with the increase? Another aspect that the Nigerian government doesn’t pay much attention to is the sensibilities of the people. In this case, the capability of the people to pay the tariff ought to have come first.
“There is recession. COVID-19 is still with us. Unemployment keeps soaring. Everywhere you turn, whether in Lagos, Anambra or Katsina, you see poverty. Prices of foodstuff have gone above the roof. Increase in electricity tariff shouldn’t be contemplated at this critical period,” he said.
Joining other Nigerians to express disapproval of the new tariff, the President, Electricity Consumers Association of Nigeria, Mr Chijioke James, also expressed consumers’ opposition to the fresh hike in electricity tariff, describing it as ill-timed.
“Why would the government increase tariff at the beginning of the year, especially a time when unemployment is on the increase, disposable incomes of the citizens continue to deplete, inflation is galloping? This is evidence of insensitivity of leadership at a time like this,” he said.
A consumer in Aboru area of Alimosho Local Government Area (LGA) of Lagos, Mr Waeed Abu, lamented that the problem was not the increment, regretting that there was no constant electricity supply in his area for the past few months.
He queried: “What exactly are we paying for? They have taken us for a ride for too long. All we need is value for whatever they are asking us to pay. I know how much I spend in buying diesel every month to run my business, yet the power distribution company still bring outrageous bills for me. It is unfair to us as citizens.
“Another bitter part of it is that our governments do not care and are not moved by what the masses have been passing through. Anyway, I am not too surprised because the so called privatisation of the sector was political.”
A landlord in Oke-Ore area of Ado Odo/Ota LGA, Ogun State, Mr Ayo Adeayo told Daily Sun that the increment was insensitive on the part of the government.
“They cannot just increase tariff without considering the fact that a lot of people had spent all the money on them during the festive period. It was badly timed. I believe that the people paying the tariff should always be put into consideration before announcing it,” he said.
Adeayo pleaded with the government and everyone that is in charge of electricity generation and distribution to have a rethink and reverse to the order billing mechanism. He maintained that implementing the new tariff would further plunge Nigerians into deeper economic mess caused by COVID-19 pandemic.
Another electricity consumer, who lives in Abule-Egba, Lagos, Mr Nicholas Chidibere, told the reporter that with the last increase in October 2020, his bill somersaulted by about 75 per cent. He described the new tariff as sheer wickedness.
“One’s salary remains where it has been in the last five or more years, yet everything keeps going up. One’s salary is not even enough to pay all the regular bills let alone saving for other things. I don’t know who we offended in this country that warrants this kind of punishment.
“With this kind of arrangement, there is no way we would not be in deep recession. Except the purchasing power of our naira improves, we won’t get out of recession easily.”