Reverse the electricity tariff hike

In line with the President Bola Ahmed Tinubu administration’s policy on subsidy removal, Nigerians last Wednesday received the rude shock that the Nigerian Electricity Regulation Commission, NERC had   tripled the electricity tariff for consumers it categorized as Band A. According to NERC,  the increment from N68/kwh to N225/kwh was made following consultations with the 11 […]

In line with the President Bola Ahmed Tinubu administration’s policy on subsidy removal, Nigerians last Wednesday received the rude shock that the Nigerian Electricity Regulation Commission, NERC had   tripled the electricity tariff for consumers it categorized as Band A. According to NERC,  the increment from N68/kwh to N225/kwh was made following consultations with the 11 electricity distribution companies (Discos) as well as the inability of the federal government to pay the  over N2.9 trillion  subsidy that would  maintain current rates up to the end of December 2024.

Two days later, at a press briefing in Abuja, the Minister of Power, Adebayo Adelabu, said the increase is a first step in phasing out electricity subsidy for all consumers in the country. The Minister said: “This tariff review is in conformity with our policy thrust of maintaining a subsidized pricing regime in the short run or the short term with a transition plan to achieve a full cost reflective tariff for over a period of, let us say three years. I have mentioned it in a couple of media briefings that it is because of government sensitivity to the pains of our people that we will not make us migrate fully into a cost reflective tariff or to remove subsidy 100 percent in the power sector like it was done in oil and gas sector.” He added that “Electricity is no longer cheap for Band A. But this policy is pro -poor. It is pro-poor. The high- end people, they are the ones that are enjoying the subsidy more than others because they consume more. This is because what they are enjoying is more than what the poor are enjoying. We are saying no, let them pay the right price, and let the poor breathe too.”

But Nigerians are not taken in by these postulations as a chorus of condemnation followed the price hike. The Nigeria Labor Congress, NLC, said the policy would further impoverish Nigerians who are battling the hardship caused by fuel subsidy removal. The Head of Information at the NLC headquarters, Benson Upah, said “The government’s decision is not only insensitive, it is callous. It further pauperises consumers, especially workers whose wages are fixed and insufficient. It similarly makes the operating environment more hostile for manufacturers with potential for an astronomical rise in cost of goods and services or in the worst-case scenario, more closures and loss of jobs. The only people who stand to gain from this mindless social violence against the people are the World Bank and IMF.”

Similarly, the Northern Elders Forum, NEF, expressed disappointment in the policy by labeling it as a reckless move and a complete disregard for the well-being and welfare of Nigerians. A statement by Abdulazeez Sulaiman, Director of Publicity and Advocacy said NEF ““recognizes that this drastic increase in electricity tariffs will have a significant negative impact on the already struggling population, further exacerbating the gap between the rich and the poor. By implementing such exorbitant electricity tariffs, the government is effectively perpetuating a form of economic oppression that will only serve to widen the gap between the rich and the poor in Nigeria. It is imperative that this act of exploitation be firmly rejected and not be allowed to stand unchallenged.”

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The statement added that “The NEF strongly believes that this decision was made without carefully considering the economic realities faced by the majority of Nigerians and it highlights the government’s lack of empathy towards its citizens. Instead of implementing policies that would alleviate the suffering of the people, the government has chosen to further exploit them. This introduction of exorbitant electricity tariffs is not only unjust but also a clear indication of the disconnect between the government and the people they are meant to serve. It is a blatant display of the government’s blatant disregard for the well-being of its citizens and a betrayal of the trust placed in them. The NEF calls on the government to immediately reconsider this ill-conceived decision and take into account the dire economic situation faced by the majority of Nigerians. Nigerians must now rise and demand accountability from their leaders, reminding them that their primary duty is to serve the people, not exploit them for personal gain.”

In a similar vein, the Minority Caucus of the House of Representatives on Friday condemned the hike and asked the president to immediately direct NERC to rescind the decision. Minority Leader of the House of Representatives, Kingsley Chinda in a statement in Abuja that  “Such a hike, which is over two hundred percent above the rate of inflation, utterly disregards the plight of ordinary citizens, who are grappling with the adverse effects of the removal of oil subsidy, galloping inflation, unemployment, and inadequate access to basic amenities. The timing of this tariff hike, amidst prevailing economic challenges, is not only insensitive but also detrimental to the well-being of Nigerians. It further highlights the disconnect between policymakers and the realities faced by the masses of our people.

“We urge Mr. President Asiwaju Bola Ahmed Tinubu  to prevail on the electricity regulator, NERC, to rescind this decision and prioritize the welfare of the people. Furthermore, we call for increased accountability and transparency in the management of resources within the electricity sector. Citizens have the right to demand efficient service delivery and fair pricing mechanisms that align with their economic realities. In solidarity with the Nigerian people, we stand firm in our condemnation of this unjustifiable increase in electricity tariffs and call for immediate action to alleviate the burdens imposed on the populace.”

We at Daily Trust join these concerned Nigerians in describing the increment as insensitive to the plight of fellow citizens who are reeling from the multifarious effects of the twin policies of petroleum subsidy removal and flotation of the Naira. The two policies have effectively resulted in soaring inflation in the prices of essential commodities and diminished purchasing power of the citizens’ income. We believe that the timing is counterproductive as Nigerians are yet to feel any positive impact from the savings generated by removing petroleum subsidy.  We also see it as a threat to the adoption of electric vehicles, which the federal government said will be one of the alternatives that would eventually cushion the effects of the fuel subsidy removal.

We, therefore, wonder why the hurry to implement these IMF/World Bank inspired policies without due regard to the welfare of the citizens that this government swore to protect?

Moreover, we are not by any stretch of the imagination persuaded by the claim that the hike in electricity tariff would only affect 15 per cent of electricity consumers who could well afford it. This is because the manufacturers and business operators such as   barber shops, laundry  and business centers would simply transfer their increased costs of production to customers no matter whether they belong to Band A or Band Z of electricity consumers. Worse than that, we are not even convinced that the distribution companies would restrict the hike to only consumers enjoying at least 20 hours of electricity daily. Already, NERC has had to fine the Abuja Electricity Distribution Company, AEDC, a sum of N200 million for imposing the hike on all its customers. While we commend NERC for its prompt intervention and order to reimburse customers in this particular case, we are worried that the DisCos could exploit other loopholes in the system to continue milking poor consumers.

Instead of punishing consumers, government should make sure that the electricity generation and distribution companies invest enough resources to improve efficiency in the system and deliver stable and sufficient electricity throughout the nation. When power supply is no longer epileptic, and the economy has withered the ravages of the fuel subsidy removal and Naira deregulation, the government may open another conversation with Nigerians regarding withdrawal of electricity subsidy. But for now, we urge Mr President to prevail on the Nigeria Electricity Regulation Commission to reverse the hike in electricity tariff.