FG Bows To Pressure From NLC, Reverses Electricity Tariff Hike

Following the industrial threat issued by the Nigerian Labour Congress on the hike in electricity tariff , the Federal government, has ordered the immediate reversal of the increase.

The Nigerian Electricity Regulatory Commission had said that in compliance with the provisions of the EPSR Act and the nation’s tariff methodology for biannual minor review, it adjusted the rates for service bands A, B, C, D and E by N2.00 to N4.00 per kWh to reflect the partial impact of inflation and movement in foreign exchange.

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But the NLC while reacting to the development had urged the Federal Government to withdraw the increase in tariff, or face an unprecedented industrial resistance by Nigerian workers.

The Congress had stated that the hike is coming at the face of the renewed onslaught of COVID-19 where workers and citizens expend their meagre resources on healthcare both for preventive and therapeutic response to the renewed COVID-19 challenge.

The Congress also noted that the increase apart from negating the agreement reached with the government in September 2020, will further imperil the local economy, leading to loss of jobs by Nigerian workers.

It said, “There is no gainsaying the fact that this tariff hike would sound the death knell for many manufacturing outfits in Nigeria as many of them would resort to either mass lay-off of workers and or direct importation of finished goods.

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“This volte face is contrary to our agreement with the government which excluded Band D and E from further increases in electricity tariff. This clearly paints a picture of a deliberate mission by the government to hoodwink and take Nigerians for a ride.”

Reacting to the development, the Minister of Power, Saleh Mamman, in a statement on Thursday, directed NERC to inform all Electricity Distribution Companies to revert to tariffs that were applicable in December 2020.

He stated that the reversal to the old tariff was to promote a constructive conclusion of the dialogue with the Labour Centres (through the Joint Ad-Hoc Committee).

He said, “I have directed NERC to inform all Discos that they should revert to the tariffs that were applicable in December 2020 until the end of January 2021 when the FGN and Labour committee work will be concluded.

“This will allow for the outcome of all resolutions from the Committee to be implemented together.”

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The Minister explained that the government had continued to subsidise 55 per cent of on-grid consumers in bands D and E and maintain the lifeline tariff for the poor and underprivileged.

“Those citizens have experienced no changes to tariff rates from what they have paid historically, aside from the recent minor inflation and forex adjustment. Partial subsidies were also applied for bands A, B and C in October 2020,” he added

The Minister stated that the outcomes of the government’s deliberation with Labour are the accelerated rollout of the National Mass Metering Plan and clamp downs on estimated billing.

He said that the role of the government was not to set tariffs, but to provide policy guidance and an enabling environment for the regulator to protect consumers and for investors to engage directly with consumers.

According to him, Bi-Annual Minor reviews to adjust factors such as inflation are part of the process for a sustainable and investible Nigeria Electricity Supply Industry.

He also stated that the regulator must be commended for implementing the subsisting regulations while putting in place extensive actions to minimize the adverse impact on end user tariffs.

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“The administration is committed to creating a sustainable, growing and rules-based electricity market for the benefit of all Nigerians.

“The administration and the Ministry of Power will also continue to devise means to provide support for vulnerable Nigerians while ensuring we have a sustainable NESI,” he said.

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