More Knocks For Government Over Electricity Tariff Increase

Works Housing and Power, Minister, Fashola
Works Housing and Power, Minister, Fashola
THE Federal Government has continued to receive knocks from Nigerians over electricity tariff hike during the week. Many of them, who spoke on the issue, blamed government for yielding to pressure from electricity distribution companies, which they said lack responsiveness, and are full of greed.
They also accused the government of allegedly colluding with the companies to rip off electricity consumers, as they argued that improved services through investment in electricity infrastructure ought to have come before hike in tariff.
The Minister for Power, Works and Housing, Mr. Babatunde Fashola (SAN) first gave an indication of impending electricity tariff increase during his maiden broadcast on the matter, saying it was inevitable for improved services by the generation and distribution companies.
Said he: “the role of government is to set the tariff and in doing so, government has committed to what is called a Multi-Year Tariff Order. This was done in order to attract investors to the market; otherwise we will not have achieved the privatisation, if the price of the product is not attractive to the investors.
“The tariff is the price of producing power. It covers cost of generation, gas purchase, transportation, transformers, staff costs and so on, disaggregated and charged per kilowatt/hour to make the business of power profitable.”
He appealed to consumers to give government opportunity to right the wrongs in the power sector by accepting the new tariff regime.
The Vice President, Yemi Osinbajo also justified the increase when he hinted recently, “I don’t think that an option of not having power is really what we want. The real issue, of course, is that at the end of the day, some of the cost goes to the consumer, but a cost reflective tariff is an absolute necessity, otherwise, privatisation and all of that simply doesn’t make sense.”
Former Chairman of National Electricity Regulatory Commission (NERC), Sam Amadi, also defended the increase when he said; “we are introducing new electricity tariffs in order to capture the realities that the DISCOs are bringing to the sector.  The realities include debts owed the DISCOs, the increase in the price of gas, rising cost of financing infrastructure used by both the power distribution and generation companies. We are not changing the scientific methodology of fixing electricity tariffs, but we are introducing new tariffs to capture the realities on ground in order to ensure operational efficiency in the industry.”
But many Nigerians have refused to buy into their justification, as they continue to call for its rejection, insisting that improved services should precede the increase.
The National Electricity Consumers Advocacy Network (NECAN) warned against what it described as the dire consequences of tariff increase by distribution companies across the country. The group is particularly concerned that the increase could harm the growth of micro, small and medium enterprises.
The Assistant National Secretary, Mr. Obong Eko said: “NECAN clearly opposes any increase in tariff. There is an outcry from Nigerians that any increase in electricity tariff will amount to very serious consequences to the economy of micro, small and medium businesses.”
The group described the Discos as inefficient and accused them of putting the issue of tariff first on the table instead of improving services.
In its reaction to the new tariff, the Trade Union Congress of Nigeria (TUC), vowed to put up resistance, because it “lacks human face, especially in view of the present harsh economic realities in the land.”
President of TUC, Bobboi Bala Kaigama said Nigerian masses would be at the receiving end of the “wrong and retrogressive policy.”
Meanwhile in Edo State, the Edo Civil Society Organisation is championing the rejection of the new electricity tariff, which it described as illegal and flagrant disobedience of rule of law.
Its Public Relations Officer, Osazee Edigin told The Guardian that the group would continue to legitimately resist any move by the Federal Government to increase electricity tariff.
A Lagos based lawyer, Yemi Adebiyi, who in May this year secured a court order against the moves by the National Electricity Regulatory Commission (NERC) to increase tariff until the instituted suit is dispensed, said the planned increase in tariff is illegal.
He said as the minister, vice president and chairman of NERC are seasoned lawyers; they should know the implication of violating court orders.
“Right now, Nigerians are not even getting value for their money, despite government investment of about $20billion in the past 10 years with no significant improvement. Is it the money to be raked from the already exploited consumers that they now want to use to bring significant change?”
But defending the planned tariff hike, the Spokesman of BEDC, Tayo Adekunle, described the tariff hike and removal of fixed charge as a win-win situation for the consumers and Distribution Companies (DISCOs).
“The tariff regime, though announced, but we will need to still take a look at it and see how it will affect our various customers, after which we will be in a position to offer a statement. But the summary is that they have removed fixed charge and then increased energy charge. It means people will now be paying for only what they consume. It is a double-edged sword,” he said.
The Director of Research and Advocacy for the Association of Nigerian Electricity Distributors (ANED), Barrister Sunday Olurotimi Oduntan said, “Discos are currently challenged by poor access to financing, due to non-reflective tariff.”

Post a Comment