FG directs NERC to suspend electricity tariff hike
…the suspension a relief – DG, MAN
The Federal Government has directed the Nigerian Electricity Regulatory Commission (NERC) to suspend the recently-adjusted electricity tariff.
The Minister of Power, Sale Mamman, made this known in a statement on Thursday in Abuja.
NERC had on Tuesday increased the electricity tariff payable by power consumers across the country. The hike in tariff, which varies, based on different consumer classes, took effect from January 1, 2021.
The regulatory agency blamed the N2 to N4 adjustment in tariff on inflation and movement in foreign exchange rates. Labour unions have threatened a showdown over the development, saying the government is insensitive to the plight of Nigerians, considering the fact that there was an increment in the last two months.
But in a statement on Thursday, the minister said there was a committee working on the new electricity tariff regime and the committee should be allowed to complete its work before any other development or adjustment.
Mamman, therefore, directed NERC to suspend the recent increment until the committee concludes its work by end of January.
He said, “The public is aware that the Federal Government and the Labour Centers have been engaged in positive discussions about the electricity sector through a joint ad-hoc committee led by the Minister of State for Labour and Productivity and Co-Chaired by the Minister of State for Power. Great progress has been made in these deliberations which are set to be concluded at the end of January 2021.
“To promote a constructive conclusion of the dialogue with the Labour Centers (through the Joint Ad-Hoc Committee), I have directed NERC to forestall the implementation of the duly performed minor review (which adjusted tariffs between N2 per kWh and N4 per kWh) until the conclusion of the Joint Ad Hoc Committee’s work at the end of January 2021.
“This will allow for the outcome of all resolutions from the Committee to be implemented together. The Administration is committed to creating a sustainable, growing, and rules-based electricity market for the benefit of all Nigerians.”
However, the Manufacturers Association of Nigeria (MAN) on Thursday described the directive by the Federal Government to suspend the implementation of the proposed electricity hike as a temporary relief.
MAN Director-General, Mr Segun Ajayi-Kadir said this, while reacting to the Federal Government directive to the NERC to suspend the recent hike in electricity tarrif.
Recall that NERC had on Tuesday adjusted upward tariff review from N2.00 to N4.00 for some bands, while citing the partial impact of inflation and movement in foreign exchange rate.
Ajayi-Kadir said the three weeks respite was to accommodate the spirit of the agreement between the Labour Union and the Federal Government on the tariff increase.
“Though there is a possibility that the increase may be reconsidered during this period, there is no doubt that the National Electricity Regulatory Commission is already anticipating an increase.
“This is why the call for circumspection and pragmatism in the matter of increase remains relevant.
“No matter what becomes the outcome of the Ad-Hoc Committee’s work, an increase at this time is ill-timed and not manufacturing friendly,” he said.
Ajayi-Kadir urged government to go beyond the reasons given for the timed suspension, to include consultations with other economic actors, such as the manufacturers.
“They are the major consumers of electricity and they are the ones whose businesses will be most impacted by the increase.
“The sector is already groaning under inclement operating environment, including the debilitating impact of COVID-19 disruptions and deteriorating infrastructure.
“It is, therefore, important for us to avoid this additional burden,” he said.
