NERC reduces electricity tariff hike, Nigerians demand total reversal
The Nigerian Electricity Regulatory Commission (NERC) recently announced a reduction in the electricity tariff for Band A customers, citing improvements in the exchange rate of the Naira to the Dollar. However, this move has been met with resistance from Nigerians who are demanding a complete reversal of the hike.
In a statement, NERC declared a downward revision of end-user tariffs for Band A customers from NGN225/kWh to NGN206.8/kWh. Despite the commission’s affirmation of commitment to a balanced regulatory regime serving the needs of the Nigerian Electricity Supply Industry, many Nigerians remain dissatisfied.
“We have been replenishing into the SPR for the last several months. I think we have sufficient supply in the SPR to address any kind of concern in the economy if we need it,” stated Hochstein during the Milken Institute Global Conference. “For now, I think we’ll continue to monitor markets, and if we need to use the SPR, the president has shown a willingness to use it to support the U.S. economy.”
Despite the reduction, various stakeholders including the Nigeria Labour Congress, Trade Union Congress, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, electricity consumers, and civil society organizations have called for a total reversal of the hike. The initial tariff hike, implemented just 33 days earlier, saw the electricity tariff for Band A customers rise by about 240 per cent.
The decision to increase tariffs faced significant backlash, with the House of Representatives, organized labor, and the Nigerian Bar Association opposing the move. The House of Representatives called for the suspension of the implementation of the new electricity tariff nationwide, while organized labor issued a two-week ultimatum demanding its reversal.
Despite the opposition, Minister of Power, Adebayo Adelabu, defended the increase, warning of a nationwide blackout within three months if the tariff hike was not implemented. The government’s stance on the matter has been firm, with the Ministry of Power’s spokesman, Florence Eke, asserting that the tariff hike would remain in place.
However, NERC’s recent decision to reduce tariffs comes after a thorough review of macroeconomic parameters and exchange rate appreciations. Electricity distribution companies (DisCos) have complied with the new tariff order, announcing reductions in their tariffs accordingly.
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In response, stakeholders have expressed mixed reactions. While some, like the National Deputy President of the TUC, Tommy Etim, and the National Treasurer of the NLC, Hakeem Ambali, consider the reduction insufficient, others, like the President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, view it as a gradual maturing of the electricity market.
Meanwhile, the Nigerian Association of Nigerian Students (NANS) has suspended its planned nationwide protest in response to the reduction in the power tariff. This decision followed engagements with the government, with assurances given on measures to end fuel scarcity and improve electricity supply.
Despite the reduction in tariffs and the suspension of protests, the issue remains contentious, with stakeholders calling for comprehensive reforms in the power sector to address the underlying challenges effectively.
