National Assembly Halts Electricity Tariff increase
By Mordi Chukwunonso
The National Assembly in conjunction with stakeholders of the power sector has postponed the electricity tariff hike initially scheduled for July 1 to the first quarter of 2021. This decision was taken after a meeting with NERC and DisCos representatives on Monday 29 June 2020.
In a press statement, members of the National Assembly while acknowledging the necessity of the tariff increase said it was coming in at a wrong time for Nigerians as it is still suffering from the negative effects of the COVID-19 Pandemic.
While addressing members of the Press, the Senate President Ahmed Lawan said, “The agreement here is that there is not going to be an increase in tariffs on July 1st. The speaker and I are going to take appropriate action and meet with the President. We are in agreement here that there is no question on the justification of the increase but the time is simply not right and appropriate measures need to be put in place.
“So between now and the first quarter of next year, our task will be to work together with you to ensure that we put those blocks in place to support the eventual increase in tariffs,’’ Lawan said.
He added that the government has been doing a lot as part of its duties to provide some form of intervention.
“I am quite aware that for this year, probably starting from last year, over N600 billion was earmarked for this sector to improve. The potential increase in Tariffs is definitely something that will be of concern to us in the National Assembly.
“There is too much stress in the lives of Nigerians today and indeed across the world because of the challenges imposed by COVID-19 pandemic and even before then, we had issues that would make it tough for our people to effectively pay the tariffs.
“one way or the other, for this business to flourish, for this sector to be appropriately fixed, for it to attract investment, something has to give way, there is no doubt about that but it is also crucial that we look at the timing for any of our actions,” Lawan said.
Rt. Hon. Gbajabiamila who was in attendance posed some questions to the DisCos and NERC “how did we arrive at the tariff or costs? Who were the stakeholders present? What was the role of the National Assembly? More importantly, is the President aware of this because the President is perhaps the biggest stakeholder of all, apart from the Nigerian people”.
On June 30 2020, DisCos claimed that the Federal Government and NERC had approved the tariff increase after the alleged attempt of NERC to disassociate itself from the commencement of tariff hike on July 1.
Gbajabiamila added, “Whatever will affect this government is something that should concern us. I think this will affect this government and if it is going to affect this government, we should all rally around our people, our president and the government to make sure we do the right thing”
In the course of the meeting, the DisCos admitted that they were not well prepared for the planned hike in tariffs even though they so much desire the increase and they agreed to defer till the first quarter of next year.
The reason for the hike in price according to the DisCos, is a follow-up to the charges set in 2015. The tariff increase would cater for revenue shortfalls in the sector. It will also stop the continuous subsidy of electricity by cash strapped Federal Government as customers pay the right price and everyone in the electricity market will take full responsibility for service delivery and payment remittance.
The representatives of the DisCos also appealed to the government to continue to bear the difference in the present tariff and what was considered as the appropriate tariff.