More hardship looms for Nigerians as DisCos mull tariff increment


While the pains of fuel subsidy removal still linger, the confusion surrounding a planned electricity tariff increment starting from July 1 has compounded the worries.

In the last three years, several upward electricity Tariff adjustments have been made under the Nigerian Electricity Regulatory Commission’s Multi-Year Tariff Order, MYTO, in line with current economic realities, in this case, the inflation rate and the exchange rate of Naira at foreign exchange window.

Consequently, In 2020 electricity tariff was reviewed upward; also January 1 2021, a 50 per cent tariff increment was implemented by electricity Companies. 2022 witnessed reviews upward.

Following the floating of the Naira at the foreign exchange market, exchanging N700-750 to 1$ and inflation rising to 21.41 per cent, there were indications of a planned electricity tariff increment.

The indication of an electricity tariff increment reached a crescendo when it went round the media during the weekend, but Abuja Distribution Company denied the claim on Monday.

AEDC said that the Nigerian Electricity Regulatory Commission, NERC, was yet to approve tariff increments.

Speaking exclusively with DAILY POST on Monday, the Assistant Manager of Public Affairs at NERC, Mr Michael Faloseyi said the commission has not approved tariff increment.

“I do not have the authority to grant any media interview, but I can confirm that the Commission has not approved any tariff increase”, he said.

But, a stakeholder in the industry, who preferred anonymity, insisted that the increment will be implemented by July 1.

According to him, the denial by DisCos does not mean that the increment will not be implemented.

“There may be some pressure from behind telling the electricity distribution companies that it is too early to announce tariff increase.

“That is why the DisCos denied the increase. The denial does not mean that it will not be implemented; it is just information management. It means that the increment would likely take place but may not be the per cent increase making the round.

“Nigerians are yet to recover from the naira parity and fuel subsidy removal; now we are jumping to electricity. We cannot task ourselves to prosperity; it does not happen like that. It should be one step at a time”, a former spokesperson to one of the DisCos said.

Speaking on the economic implication of an electricity tariff increment, Idakolo Gbolade, Chief Executive Officer of SD & D Capital Management, said it will further weaken the purchasing power of Nigerians.

He, however, appealed that the government should, as a matter of National interest, shelve the idea of the tariff increment.

“The implications of the 40% tariff increment on electricity will further weaken Nigerians and reduce their purchasing power.

“The subsidy removal is being endured, while the exchange rate policy has increased the cost of services determined by the US dollars. We know that effective government policies can surmount this hardship, but there should be no additional burden on the people who can wear them out in the short run.

“I will sincerely appeal to the government to shelve the impending tariff increment in the interest of the masses.

“We know that these government policy directions could eventually lead us to economic prosperity in the long run as a nation, but in the interim, Nigerians must live to enjoy the anticipated benefits”, he stated.

Also, Prof Segun Ajibola, the former President and Chairman of the Council of Chartered Institute of Bankers of Nigeria said the increment in tariff should reflect in the quality of service delivery by the DisCos.

“For an increase in electricity tariff, the GENCOS and DISCOS need to live up to their callings and ensure that there is value for money.

“This is lacking at the moment, but one is quite hopeful that a visionary government of today would not condone the national embarrassment the whole arrangement of power generation, transmission and distribution has turned to in Nigeria.

“Overall, Nigerians should realise that this is one occasion in our national life when some things may have to get temporarily worse before they can get better.

“And, of course, the promised palliatives from the government will be a soothing balm pending the time the fruits of the current hard, courageous policy dimensions will be ripe enough for everybody to pluck and suck”, he stated.

When DAILY POST contacted the Nigerian Labour Congress Spokesperson, Benson Upah for comment, he stated that workers had already made their position known to the government on the proposed electricity increment.

He stressed that the government should do everything possible to shelve the proposed increment.

Earlier, a statement signed by NLC President, Joe Ajaero vehemently opposed the planned electricity tariff hike.

The President of Network of Energy Reforms Nigeria, Nigeria Consumer Protection Network, Mr Kunle Olubiyo said it is likely that DisCos would backtrack on their planned tariff increment because it was insensitive at this moment.

According to him, the federal government must be well guided on the tariff increment decision to avoid imposing further suffering on Nigerians.

He noted that the template for reviewing the pricing of tariffs should be looked into by the government.

“It is still unclear; it seems the DisCos would backtrack on their decision to hike electricity tariff pending approval from NERC. The Federal Government must be guided on their decision.

“The Federal Government should be properly guided, also look into Gas Pricing and clean up all possible areas of Price Gold Plating & Padded Cost of Electricity Tariff by reviewing the Methodology/ Templates. I mean the price / Tariff Indicators.

“Gas Pricing should be done in Naira. Most importantly, access to Prepaid Metres should also be addressed by the Government by giving Credit Facility to Indigenous Metres assembling plants/made in Nigeria Metres Manufacturers”, he said.