Monday, March 8, 2021

Again, Buhari govt announces new hike in electricity tariffs across all bands

The new tariffs are expected to rise even higher mid-2021 upon implementation of a Cost Reflective Tariff (CRT), billed to commence from June.

• January 5, 2021
Muhammadu Buhari 1
Muhammadu Buhari 1

Two months after the Buhari administration controversially imposed an increase in electricity tariffs, a new hike has been approved for power distribution companies (DisCos), effective from January 1, 2021.

Nigeria’s power regulator, NERC, had in a revised Multi Year Tariff Order (MYTO) on December 30, approved over 50 per cent hike in energy bills, Daily Trust reported on Tuesday.

Under the new arrangement, the revised Service Based Tariff (SBT) will witness increased billing for customers under bands A, B and C (those with guaranteed minimum daily supply of between 12 to 20 hours) and bands D and E customers (those who see a few hours of power or no supply at all in a day).

NERC had in November implemented a 10 percent discount for band A – C customers, while exempting band D and E customers from tariff hikes.

This followed the reliefs sought by organised labour, which had threatened industrial action to protest the tariff increment.

The immediate reliefs were, however, bound to be reviewed at the end of the year (2020).

The new tariff order NERC/225/2020 signed by NERC boss Sanusi Garba, hinged the increment on Nigeria’s 14.9 percent inflation rate (recorded in November), as well as the depreciation of the naira against the dollar in the foreign exchange market (N379.4/$1 as of December 29, 2020).

It also attributed the hike to “available generation capacity, U.S. inflation rate of 1.22 percent and the Capital Expenditure (CAPEX) of the power firms.”

The new tariffs are expected to rise even higher mid-2021 upon implementation of a Cost Reflective Tariff (CRT), billed to commence from June to December this year, Daily Trust reported, citing the NERC Order.

The federal government had repeatedly assured of facilitating nationwide distribution of at least one million free prepaid meters under its National Mass Metering Programme (NMMP) which commenced in October last year.

With many Nigerians yet unable to access the free meters, estimated billing has remained rife, as many small business owners grapple with outrageous energy bills.

Peoples Gazette learnt that while Abuja Electric (AEDC) had only recently complied with the federal government’s directive to issue meters to customers for free, another disco Ikeja Electric had suspended installation and issuance of prepaid meters since December 2020.

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