Nigerians fume over electricity tariff hike

Posted by News Express | 6 January 2020 | 757 times

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•Photo shows transformer

Nigerians have roundly rejected the resolve of the industry regulators to hike electricity tariffs across board from April 1, 2020. They described as epileptic and grossly unavailable power supply to all end users across the country that make any rate hike inadvisable.

To avoid any untoward actions, they citizens appealed to the federal government not to allow a few individuals to further milk them by paying more for darkness instead of stable power supply they critically need for domestic and commercial uses.

In separate reactions on Sunday to media reports at the weekend that the Nigerian Electricity Regulatory Commission (NERC) would from April 1, 2020, unveil a higher tariff regime, the citizens warned against overstretching their lean financial resources.

They said that the hike would be acceptable to them if the 11 Electricity Distribution Companies (DisCos) in the country meet 100 per cent metering of electricity consumers, which is the basic requirement for any future increase in tariffs in the country.

In its December 2019 publication, NERC had said that there would be an upward review of electricity tariffs under the Minimum Remittance Order (MRO) of 2020.

First to kick against the policy was the Energy Consumer Rights and Responsibilities Initiative and the All Electricity Consumer Protection Forum, which told LEADERSHIP yesterday that the tariff increment was unjustified based on present realities.

The national president of the Energy Consumer Rights and Responsibilities Initiative, Mr Sural Fadairo, said that increasing the cost of electricity was not the panacea to Nigeria’s energy crisis.

He said: “If they want to increase tariff because the distribution companies are under remitting due to debts by consumers that will not solve the problem. If people are refusing to pay now because they are disputing their bills, will they pay if they are further increased?

“What they need to do is to meter all electricity customers so that we can end the issue of estimated billing. So, from the consumer point of view, we are totally against any increment because power generation and supply has not improved significantly in the country, “he said.

To the national coordinator of All Electricity Consumers Protection Forum, Mr Adeola Samuel-Ilori, the increase was totally uncalled for in all ramifications.

He said: “The basis for such increase at this time can’t be justified in that consumers have not been metered and they still purchase transformers and other line materials by themselves with attendant extortion via estimated billings.

”All these are not taken into consideration and extensively dealt with before contemplating tariff increase,” he argued.

The chairman of the Network for Electricity Consumers Advocacy of Nigeria (NECAN), Tomi Akingbogun, in a telephone conversation from London with LEADERSHIP, described the development as “counter-productive, especially in an economy that is already over-burdened with a lot of challenges and struggling to meet up.

“It is not a welcome development. This review was proposed sometime last year and we the customers were not happy because we knew it has a lot of negative implications for the economy. For instance, cost of production will again shoot up.

“And when you look at the performance of the DisCos after the much-touted privatisation, you will certainly conclude that there is nothing to warrant any increase in the tariffs,“ he said.

He advised NERC to look into the responsibilities of the 11 DisCos at the signing of the contract during privatisation, among which, according to him, is that customers were to be metered 100 per cent for the tariffs to go up.

Akinbogun said: „The system is very untidy and we expect NERC to clear all the grey areas before talking of any tariff review that will amount to increase in the current charges being done largely through the estimated billing methodology under which many customers are already accusing the DisCos of over billing.

“The responsibility of metering all customers by the DisCos has not been met; so why increasing the tariff. And when you do so, the cost of production will further rise, and the implication is that prices of goods and services will follow amidst inflation.

“It is true some DisCos complained that they are not making profits, but in reality they are making unreported profits. So to me, by trying to increase the tariff without metering the customers is like setting a trap in the economy,“ he said.

Also, the managing director, Monarco Guards Nigeria Ltd, an Abuja-based security outfit, Mr Lucky Monye, condemned the increase in electricity tariffs. He described the upward review as untimely and unfortunate considering the economic realities at the moment and the poor performance of the DisCos regarding electricity supply.

Monye said: „Nigeria is seriously under pressure under the present economic realities, so I think this increase is very untimely. How can this happen when the government is preaching ease of doing business. And we are told that Value Added Tax (VAT) has been increased. This I think is not good for the economy.“

On his part, Mr Simon Owoicho, a property owner at New Nyanya in Karu local government area of Nasarawa State, said that „any attempt to increase the tariff is irrational on the part of NERC because the current one is already on the high side even amidst the economic hardship and erratic supply.“

Owoicho who implored the government to be prepared to subsidise the cost of electricity in the face of the new tariff regime, said: „I am occupying a two-bedroom flat and paying N4,000 for the electricity I use domestically, which I consider to be high, especially without stable and quality supply.

“Now that they have increased it, that means I am going to pay more; that is bad.“

The executive director, Civil Society Legislative Advocacy Centre (CISLAC), Auwal Musa Rafsanjani, in his reaction, declared that the increment would further make life unbearable for poor Nigerians.

Rafsanjani observed that many Nigerians were finding it difficult to meet their daily needs.

He said: “The hike is coming at a time when Nigerians are struggling to make ends meet, hardworking Nigerians are even finding it difficult to pay medical bills and school fees for their wards, because government schools and hospitals are not reliable. This is also coming at a time when many Nigerians have either lost their jobs or struggling to get employed.

“One would have expected the government to look elsewhere if they want to generate more revenue, rather than impose an indirect tax on poor Nigerians in the name of electricity fee hike. It is important to note that many Nigerians do not enjoy the electricity we are talking about, yet they are being forced to pay through an estimated billing system. This will only increase the sufferings of Nigerians.

“Government should rather increase tax on multinational companies who are making money from operations in Nigeria, but the reverse is the case as the government is even granting tax waivers to some of them.

PDP asks NASS to intervene

Meanwhile, the opposition People’s Democratic Party (PDP) has rejected the over 200 per cent increase in electricity tariff announced by NERC, describing it as draconian and completely against the wellbeing of Nigerians.

The party urged the National Assembly to rescue Nigerians from such draconian policy by deploying its statutory legislative instruments to call the executive arm to order in the interest of our nation.

It further charged the federal government to immediately rescind the obnoxious and provocative policy and consult further with Nigerians before any such tariff hike.

In a statement issued yesterday by the PDP national spokesman, Kola Ologbondiyan, the party described the increase in electricity tariff as a furtherance of the fleecing of Nigerians, who are already overburdened and groaning under the weight of high costs, economic repression and heavy taxes foisted on them by the insensitive APC administration.

Ologbondiya said: „It is lamentable that Nigerians, who are already suffering the devastating negative impact of the recent increase in the Value Added Tax (VAT) from five per cent to 7.5 per cent by the All Progressives Congress (APC) administration are now being further suppressed with increased electricity tariff.

“Our party holds that the increase in electricity tariff, under the prevailing harsh economic conditions, is injurious to the wellbeing of Nigerians as it will further stress the productive sector and lead to an upsurge in the cost of regular and essential goods and services, including food, medicine, housing, education and other critical needs.

“This APC policy, if allowed, will worsen the suffering of Nigerians as it will put more stress on already overburdened families, cripple businesses, result in job losses and exacerbate the prevailing frightening unemployment rate under the Buhari administration,“ he said.

It’s a welcome development – DisCos

An official of Kaduna Electricity Distribution Company (KEDC), who sought anonymity, said that the development was long awaited one.

According to him, the new tariff regime would lead to improved supply and mitigate the liquidity crisis being faced in the Nigerian electricity supply market.

The head of Corporate Communication, Abuja Electricity Distribution Company (AEDC), Mr Oyebode Fadipe, declined comment, saying the company would do so later.

NERC denies increasing tariff

In a reaction, NERC (industry regulator) said that no tariff increase had been approved by the commission yet.

NERC general manager for Public Affairs, Mr Usman Arabi, made the clarification in a statement he placed on the agency’s website, yesterday.

Arabi said: ”The attention of the NERC has been drawn to the publication in several electronic and print media that end-user electricity tariffs have been increased following the approval of the minor review (2016 – 2018) of the 2015 Multi Year Tariff Order on August 21, 2019.

“We wish to provide guidance that the minor review implemented by the commission was a retrospective adjustment of the tariff regime released in 2015.

“This is to account for changes in macro-economic indices for the years 2016, 2017 and 2018 thus providing certainty about revenue shortfall that may have arisen due to the differential between tariffs approved by the regulator and actual end-user tariffs.

“The commission, therefore, wishes to notify the general public that no tariff increase has been approved by the commission vide the order,” he said.

Arabi said, however, NERC in the discharge of its statutory responsibilities enshrined under the Electric Power Sector Reform Act, would continue to undertake periodic reviews of electricity tariffs in accordance with the prevailing tariff methodology.

According to him, in all instances of such reviews and rule making, the commission will widely consult with stakeholders and final decision will take due regard of all contributions. (Leadership)

 

 


Source: News Express

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