Nigeria: Proposed Electricity Tariff Increment


The Managing Director, Eko Electricity Distribution Company Plc, Mr Adeoye Fadeyibi recently advocated a new regime of electricity tariff in the country. The Chief Executive Officer of one of the eleven DISCOs that emerged following the unbundling of Power Holding Company of Nigeria (PHCN) argued there are existing objective conditions which warrant upward review of electricity tariff based on market rules that guide such process.

According to him, prevalent indices or parameters have been considered as requirement for increase in tariff. While Mr. Fadeyibi may have unfurled what may be a legitimate position of investors in the power sector, it however remains a compelling concern that such position further reinforced speculations that government was seriously contemplating approval for upward review of existing tariff which most Nigerians consider prohibitive amidst continuous epileptic power supply across the country.

It would be recalled that the Minister of Power, Works and Housing, Mr. Babatunde Fashola had in 2017 hinted amongst other things that government was working towards reaching an agreement on the tariffs that would be paid by eligible customers.

There is no doubt that increase in electricity tariff is bound to further encroached on the disposable income of average Nigerians, however what has thus become increasingly evident is that electricity consumers already overburdened with arbitrary charges would have to contend with new electricity tariff coupled with controversial billing system sooner than later. While guidelines for increasing electricity tariff may not be farfetched; it is however unfortunate if such objective conditions ignore prevailing failure on the part of DISCOs and other actors in the power sector to deliver the required services to electricity consumers.

It would amount to travesty of trust of mutual business transaction if requirement for reviewing electricity tariff is solely predicated on the convenience of investors to the exclusion consumers’ satisfaction who are compelled to pay so exorbitantly; and more disgustingly for services not provided. It also stands logic on the head that an upward review of tariff could be on the card when overwhelming majority of Nigerians still groaning under acute shortages of power supply. Notwithstanding that the Minister in charge of power has consistently insisted power generation and distribution have considerably improved with 7,000 MW generation capacities and 5,000 MW distribution capacities, regular power outage still remains a prevalent occurrence across the country.

While it is conceded that investors in the power sector could be facing enormous challenges which largely were unexpected considering the prevailing situation in the country, it is however rather untenable to make average consumers of electricity the scapegoats that must bear the brunt of the aggressive revenue drive that has become attractive means of shoring up profit margins of investments in Nigeria. It is indeed curious that investors in the Nigerian power sectors have become Oliver Twist without corresponding improvements in service delivery five years after they took over operations of the sector with promises to provide efficient services to the satisfaction of customers.

Not only have these investors failed to deliver on their mandate, it is also a common knowledge that government has on a number of occasions in the last three years been compelled to provide funds to stabilise the operations of DISCOs and GENCOs. Unfortunately, the sector appears not to be showing signs of significant transition into a privately driven entities in terms of investments beyond the nomenclatures of the investors.

The National Electricity Regulatory Commission (NERC) therefore owes it a duty to Nigeria to forestall the exploitations of electricity consumers. Urgency for a reflective tariff in electricity billing should not take precedent over the quest for efficient service delivery as it would be unjustifiable to increase tariff for services not provided. DISCOs ought to be concerned that consumers are still battling with the issue of estimated billing, epileptic power supply and associated challenges in the country.

The Federal Ministry of Power is therefore urged to intensify efforts at improving requisite infrastructure for the efficient evacuation and distribution of power. There are a number of priority issues requiring urgent attention for strategic repositioning. Rather than talk about tariff increment now, perhaps it will be more plausible if the DISCOs go after defaulters; especially government establishments and agencies that are highly indebted.



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