Reducing tariff on utility that’s hardly available

He noted particularly the petition by industrial and commercial consumers under the auspices of the Manufacturers Association of Nigeria, citing negative impact on their production costs and increased potential for job cuts, demanded a drastic reduction of their tariffs.Amadi said NERC conducted public hearings to obtain the views of the different strata of consumers on […]

He noted particularly the petition by industrial and commercial consumers under the auspices of the Manufacturers Association of Nigeria, citing negative impact on their production costs and increased potential for job cuts, demanded a drastic reduction of their tariffs.
Amadi said NERC conducted public hearings to obtain the views of the different strata of consumers on the effects of the increase, and also consulted chief executive officers of the distribution companies before taking the latest decision
Any reduction in price for goods and services should be a welcome development to the customer, but this particular gesture has neither rhyme nor reason. This is because many Nigerians are at a loss of how to react to reduction in price of a commodity that is not available.
In a country where many parts report not having electricity supply for months, announcement of tariff reduction has been greeted with derision.  Figures show that only about 40 per cent of the population have access to electricity, even if erratic, with about 90 million people lacking access. The dire state of electricity supply in the country has been a recurring problem, despite billions of dollars in investments in the power sector under a reform programme that has not proved its mettle.   President Goodluck Jonathan’s promise to ensure that Nigerians enjoy a minimum of 18 hours of electricity supply a day has not been redeemed; in fact, since that pledge, power generation has dipped further. Government officials continue to shift the goal post for stable power supply in the country. The groundwork for extended and stable power supply has not been done, meaning that the tariff reduction has no meaning, except to score points in a heated political season. Such groundwork would include the government looking into the controversial metering system.
 Many consumers have not been able to acquire meters, despite paying exceedingly high fees for them.  Lack of meters means that consumers are arbitrarily assessed, creating a lot of room for officials to short-change consumers and the public utility company concerned.  This situation often gives rise to conflicts, because where there may be no supply for months, the consumer is billed for the period.  
The tariff was initially hiked because the private distribution companies complained that they could not deliver at the current rate. The complaint caused the NERC to announce an increase in electricity tariff by between N1 and N5 per kilowatt hour, depending on whether the consumer is private residential or commercial enterprise.
It was only in May last year that NERC said the new tariff regime it announced at the time would take effect from the following June 1, and that most electricity distribution companies would retain the N750 fixed charge under the MYTO.
The implementation date for the new price, which is after the presidential election, leaves much to be desired regarding the intention of the government’s action.
The oft-repeated stories and promises for improved power supply in the country have become so commonplace that they now ring hollow. That may be the reason for absence of public enthusiasm in the recent announcement of the resuscitation of the 110MW Ajaokuta Steel Company’s thermal power plant in Kogi State, which would be an important addition to the national grid.
The bottom line is that when power is sufficient and steady, this would drive the economy so that in the long run consumers would be able to afford paying a reasonable cost for it.