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NERC silent amid uncertainty on electricity tariff hike

In the past two weeks, reports have suggested a 40 percent rise in electricity tariff from July 1, due to spiralling petrol prices.

AUTHOR:

Bunmi Aduloju

The Nigerian Electricity Regulatory Commission (NERC) has failed to state its position on the speculated 40 percent increase in electricity tariff, despite widespread discourse.

In the past two weeks, reports have suggested a 40 percent rise in electricity tariff from July 1, due to spiralling petrol prices.

The increase is said to be contingent on the 2022 multi-year tariff order (MYTO), which is due for a bi-annual review this month.

In essence, the previous tariff increase, which was in place from January to June of this year, is expected to be reviewed, and a new one is expected to go into effect this month.

Since the development made headlines, major associations have condemned the supposed electricity tariff increase.

The Nigeria Labour Congress (NLC) said plans by the federal government to increase tariffs are “insensitive and callous”.

NERC is the federal government body in charge of regulating Nigeria’s electricity supply industry. Among other things in its purview, the commission sets cost-reflective industry tariffs.

“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,” NLC had lamented.

The Manufacturers Association of Nigeria (MAN) had also asked the NERC to diversify energy sources as the alleged tariff increase would affect the industrial sector and consumers.

“Already, we have power constituting between 28-40 percent in the cost structure of manufacturing industries,” MAN said.

“You can imagine the impact on manufacturing industries that are energy-intensive such as metal processing, heavy machinery, and chemicals manufacturing.”

Also speaking on the matter, electricity distribution companies claimed that the tariff increase has not been approved by the NERC.

Busolami Tunwase, public relations officer of Ibadan Electricity Distribution Company (IBEDC), in an interview with NAN on June 1, said the NERC had yet to give a directive on the electricity tariff hike.

“I am not aware that NERC has given us any such directive. It is the commission that does the whole thing and I am not sure it has given such a directive,” Tunwase said.

“But, any moment we get the directive to that effect, we will announce it and it will commence based on instructions from NERC.”

On June 26, the Abuja Electricity Distribution Company (AEDC) also said the NERC had not given the approval for the tariff increase.

On Saturday, reports also claimed that the planned electricity tariff hike had been suspended.

But as several claims stoke uncertainty on the subject across the country, the NERC has remained quiet, refusing to speak on whether the tariff has been or would be adjusted.

When TheCable reached out to Mike Faloseyi, a spokesperson at NERC, he declined to comment on the issue.

“When the commission wants to speak, the commission will speak,” he said.

The Cable

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