UPDATED: Nigeria suspends plan to increase electricity tariff

Lantern in darkness used to illustrate the story. [Photo credit: YouTube]

The Nigerian Electricity Regulatory Commission (NERC) has backed down on its earlier plan to raise electricity tariffs effective April 1 this year.

In a directive issued on Tuesday titled: “Order on the Transition to Cost Reflective Tariffs in NESI,” the commission announced its decision not to go ahead with the increase.

“There shall be no increase in tariff of end-use customers on April 1, 2020,” the commission announced on its official Twitter handle.




Instead, the commission asked operators in the power sector, including electricity generation and distribution companies, to submit a performance improvement plan (PIP) committing them to a higher quality of service.

The agency said the existing tariff regime would be retained, while the performance improvement plan would form the basis for future tariff review.

The commission did not say when the new electricity tariff would be executed.

On December 31, 2019, NERC had announced its plans to immediately review electricity tariffs in the country from January 1.

The order, titled “December 2019 MYTO Minor Review Order” for the 11 electricity distribution companies (DISCos) was jointly signed by the Chairman of the Commission, Joseph Momoh, and the Commissioner for Legal, License & Compliance, Dafe Akpeneye.

However, the commission clarified later that the new tariff regime would not take effect until April 1, 2020 to allow it sufficient time to consult all the interest groups following misgivings by many Nigerians.

The federal government had also offered to continue to subsidize the gap in electricity cost to consumers pending the adjustment in tariffs.

The NERC order involved the review of the electricity tariffs chargeable by the 11 DISCos for all categories of consumers in the country, except the residential category (R1).

But a review of new tariffs by PREMIUM TIMES showed price increases would have ranged between 60 per cent in places like Ikeja, to about 73 per cent in Abuja, and about 78 per cent in Enugu.

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For instance, residential consumers, particularly those categorised as R2, in Ikeja, who have been paying about N13.34 per kilowatt hour (kWh) under the 2015 MYTO would be paying about 59.7 per cent increase.

Similarly, their counterparts in Enugu, who have been paying about N17.42 per kWh since 2015 will be paying about N30.93 kWh, about 77.6 per cent hike under the new dispensation.

Consumers in Abuja and environs who have been paying N27.20 per kWh since 2015, will be paying N47.09 per kWh, over 73 per cent increase.

Except consumers in the Residential (R1) category, who will continue to pay N4 per kWh, all other categories of consumers, namely commercial, industrial and special, will pay higher tariffs, some as high as over 100 per cent.

The R1 are those categorised as poor under the life-line group consuming about 50 kWh or less.

The R2 consumers are those residing in houses, flats, or multi-storeyed buildings and using single or three-phase meters. These consist of the bulk of the consumers spread across the country.

R3 consumers are those who reside in houses, flats or multi-storeyed buildings, but use low voltage maximum demand load, while their R4 counterparts use high voltage maximum demand load (11|33kV).

Tuesday’s directive, however, means there will be no increase in the tariffs for now.

NLC Kicks

Earlier on Tuesday, the Nigeria Labour Congress (NLC) condemned the plan to increase the electricity tariff.

The NLC President, Ayuba Wabba, in a statement, said that such an action would only add more pains to Nigerians amidst the COVID-19 pandemic and its impact.

“The leaders of our affiliate unions were unanimous in rejecting the planned increase in electricity tariff during our recent interactive session with NERC in Kano,” he said

He said any increase in electricity tariff would only convey a deafening expression of insensitivity to the plight of the Nigerian people who are currently dealing with the social scare, income hemorrhage, economic squeeze and mortal dread of COVID-19.

“We urge the Nigeria Electricity Regulatory Commission not to embark on any fruitless adventure that would cast aspersion on the good intentions of Mr. President,” he said.

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