Organized labour, Civil Society Organizations, and power sector experts are demanding a complete reversal of electricity tariffs and a reassessment of the power sector’s privatization.
They criticized the Federal Government and the Nigerian Electricity Regulatory Commission for the modest N18 reduction in electricity tariffs for end-users under Band A.
NERC recently announced a tariff decrease for customers under Band A feeders, reducing the rate to N200.6 per kilowatt-hour from N225.
Discos such as Ikeja Electric, Abuja, Kaduna, Ibadan, and Enugu implemented the new tariff on Monday.
This decision comes shortly after NERC approved a 240% tariff hike for customers on Band A receiving between 20-24 hours of supply.
Despite the economic challenges faced by Nigerians, they, along with organized labor and other organizations, are pushing for a complete reversal of the hike.
The Trade Union Congress issued a two-week ultimatum to NERC to reverse the April tariff hike.
However, NERC decided on a downward tariff review, citing improved macroeconomic parameters. The Naira also appreciated to N1353.21 per Dollar on Monday at the foreign exchange market, up from N1400.4 on Friday last week.
While commenting on the decision, NERC said, “The Commission has considered changes in the macroeconomic parameters over the preceding month of April 2024 and especially the appreciation of exchange rates – consequently, the Commission has approved a downward review of end-user tariffs for Band “A” customers from NGN225/kWh to NGN206.8/kWh”.
The Commissioner of Legal, Licensing, and Compliance at NERC, Barr. Safe Akpeneye, emphasized that the reduction in tariff was based on various macroeconomic factors.
However, the decision was met with criticism from the NLC, Civil Society Organizations, and many Nigerians, who deemed the reduction insignificant and superficial.
The NLC’s spokesperson, Benson Upah, described the move as tokenism, stating that it would not significantly benefit consumers, affirming the demand for a complete reversal of April’s tariff hike and a reevaluation of Nigeria’s power sector privatization.
“This is tokenistic. It falls far below our demand or expectations. Doubtful if this will make a positive impact on consumers.
“A total reversal and a review of the privatisation of the power sector is our demand”, he said.
Also, the National Secretary of the Network for Electricity Consumers Advocacy of Nigeria, Uket Obonga, criticized NERC, accusing the regulatory body of being confused and making a mockery of the sector.
“NERC is confused. You wake up to issue electricity price hike. Is that the methodology of tariff fixing? NERC should not mock themselves.
“A methodology designed by the Commission has yet to be followed. All their claims about the benefit of electricity subsidy removal are scams”, he stated.
According to the 2023 Electricity Act, Section 116(6) stipulates that proposed tariffs should be published in newspapers and the official gazette to allow stakeholders to raise concerns and provide input to the Commission. The Commission is then required to issue notices to relevant stakeholders, setting a timeframe for them to submit their input for consideration before updating the tariff methodology. Uket Obonga alleged that NERC did not follow due process in issuing May’s tariff order.
A retired staff member of the defunct Power Holding Company of Nigeria formerly known as the National Electric Power Authority, Ewetumo A .A, criticized NERC, stating that the recent tariff review demonstrates the shallow and misguided nature of NERC personnel.
“It only shows how shallow and misdirected our bureaucrats and technocrats in NERC headquarters are.
“They refused to condemn a Gas-to-Power Policy denominated in US Dollar but are quick to pass on to hapless Nigerians the Forex fluctuations.
“NERC has no feasibility studies on Load Demand or a blueprint for building Power Plants to meet citizens’ energy needs nationwide but only to ration and price the little Megawatts remaining on the Grid”, he stated.
The Lead Director of the Centre for Social Justice, Eze Onyekpere, also criticized the tariff reduction, describing it as a foolish move by NERC. He called for a return to the previous status before April’s tariff hike.
“It is a silly manoeuvre. It is above the market cost of electricity. How sustainable is the Naira appreciation?
“If the Naira slumps tomorrow, will the tariff be increased? That is why I call it a silly manoeuvre.
“They should go back to the status quo. Nigerians should know the actual cost of electricity. I am not impressed,” he said.
