Nigerians to Pay more for Electricity Supply July 2023

• NLC kicked against alleged plan to increase electricity tariff

Indication has emerged  that Nigerians are expected to pay more for electricity supply come July 2023.

This development is not unconnected with President Bola Tinubu’s declaration in his inaugural speech two weeks ago about the end of subsidy.

Government spends monthly subsidy of about N50 billion in the electricity sector owing to revenue shortfall and so the tariff hike due from July 1, could be another President Bola Ahmed Tinubu administration’s market reform.

Tinubu’s administration has already removed subsidies on Premium Motor Spirit, (PMS), deregulating the forex exchange and other decisions that have impacted on the price-setting of the Nigerian Electricity Regulatory Commission, (NERC), 2022 Multi-Year Tariff Order, (MYTO).

It was gathered that the power sector players have been unable to meet the threshold of supplying at least 5,000 megawatts a year after signing contracts with NERC, NERC’s current Service Based Tariff, (SBT), was benchmarked on an exchange rate of N441/$ and inflation of 16.97 percent.

Although, NERC’s projected tariff for July 2023 was expected to remove subsidy and increase the earlier frozen tariff band D and E, increasing the bands from N54.59/kilowatt to N62.16 for band D and N48.37/kilowatt to N61.16 on average with an average increase across the bands moving to N67/kilowatt, the prevailing floating of the naira and spike in inflation is projected to move the new average tariff to about N88/kilowatt for the sector to recover the cost.

Meanwhile the Nigeria Labour Congress, (NLC) has kicked against the alleged plan to increase electricity tariff by 40 per cent on July 1.

The Congress described the move as insensitive and callous, adding that it reflected an organised indifference to the well-being of consumers, especially, the poor ones.

The NLC said this in a statement issued by its President, Comrade Joe Ajaero on Thursday in Abuja.

The statement reads: “The plan to increase electricity tariff by 40 by July 1st is both insensitive and callous and reflects an organised indifference to the well-being of consumers, especially, the poor ones.

“The massive increase is explained away as a response to the over 100 per cent increase in the pump price of premium motor spirit. Details reveal a movement in inflation from 16.9% to 22.41 (threatening to needle 30), and a shift in exchange rate from N441 to N750.We believe not even these figures are a justification for this reckless proposed tariff increase.

“The issue of capacity to pay and quality of service delivery are not only germane but superior to any rationalisation by market logic. The service providers in spite of sundry support have not been able to meet the threshold of 5000 megawatts.

“Coupled with this, there have been surreptitious increases without notice in violation of statutes. The inherent risk in the new regime of tariff is that there is no control, implying that by August, consumers will pay new rates.

“The other risk is that by the time other products or service-rendering entities come up with their new prices or rates, the ordinary person would have been compacted into dust. We would want to advise apostles of the market who have called NLC all sorts of names to check their conscience.

“The rate at which they are going is highly combative and combustible. With the contemplation of payment of school fees in tertiary institutions and increases in privately-owned ones in addition to other costs/tariffs on the way, life in Nigeria could truly be Hobbesian.

“The market economies which the Market Fundamentalists seek to emulate, have in place socio-economic safeguards which we do not have. In light of this, our advice is that this proposed tariff hike should be shelved for our collective safety.”