Coming
barely a year after the Nigerian
Electricity Regulatory Commission (NERC) announced a sharp increase in
electricity tariff, the latest hike, even when there is yet no appreciable
improvement in power supply, is a slap in the face of Nigerians who have been
made victims of oppressive electricity merchants. The Minister of Power, Works
and Housing, Barrister Babatunde Fashola
(SAN), had, about a month ago, disclosed that electricity tariffs would be
increased, evidently, against the backdrop of low power output.
The House of
Representatives, Manufacturers Association of Nigeria (MAN) and the Nigeria
Labour Congress (NLC), among others, kicked against the move and asked
government to stay action just as Nigerians were also opposed to any increase.
Against this
overwhelming public sentiment, NERC, the other day, went ahead to announce a
new tariff regime for consumers. The tariffs show that consumers would witness
different levels of increase across the country but would no longer pay the
monthly fixed charge. But Nigerians have for long protested the imposition of
fixed charges and estimated bills for electricity neither supplied nor
consumed. The government is only being smart by removing the irritant fixed
charge and then putting it back through the new tariff, which makes no
difference. As a matter of fact, the illegal fixed charge collected from
consumers should be refunded.
According to
NERC, under the new tariff regime, residential customer classification (R2) in
Abuja, for instance, will no longer pay N702 fixed charge every month but will
have their energy tariff increased by N9.60.
Similarly,
residential customers in Eko and Ikeja electricity distribution areas will no
longer pay the N750 fixed charge but will be getting N10 and N8 increase
respectively in their monthly energy charges. What, for instance, is the basis
for differential tariff regimes for residential customers in Lagos metropolis.
It is
immoral for government to embark on frequent increase in electricity tariff
without ensuring a corresponding increase in power supply, especially, in the
face of the huge sums expended on the sector in recent times. Nigerians have
suffered for too long because of epileptic power supply with industrial
production and a host of other economic activities being paralysed too.
The MAN
laments regularly that power alone gulps 40 per cent of production cost of its
members, who have a combined consumption capacity of 15,000 megawatts (mw),
while the maximum generation from the unreliable national grid is less than
5,000mw. If the point is truly appreciated that electricity is critical to
economic development, government ought to subsidise electricity for now to grow
the economy, create jobs and sustain development before passing the cost on to
consumers. The issue of pricing is critical. Considering Nigeria’s low level of
economic development, allowing investors to prey on consumers would certainly
be counter-productive.
Granted that
it is fashionable to privatise public utilities, Nigerians cannot adopt the
model used for such in developed industrialised economies. The sector should
take cognizance of the social and economic realities in Nigeria. For the
umpteenth time, the point must be made that rather than hiking tariff every now
and then, government should focus on diversification of power supply sources to
reduce the over-dependence on gas or only one source of which there is no
assurance of steady supply because of the challenges in the Niger Delta.
The
available alternative energy sources include solar, wind, coal and hydro, among
others. And government had also expressed interest in biofuels. A
well-structured power supply mix is, therefore, needed to stem the endemic
electricity problem! Government should help the situation with alternative
energy sources.
For
instance, whereas the Niger Delta could depend on gas, there is no reason for
states like Enugu and Kogi with abundant coal deposit not to use coal as a
source of energy. Different parts of the country could utilise available energy
resources around them for power supply.
Nigeria
needs more than 40,000mw of electricity, which is a far cry from what is
currently being generated. That Nigerians need power is stating the obvious.
The Multi-Year Tariff Order (MYTO) was introduced to take care of different
people but the framework seems to have failed.
Consequently,
Nigerians or Nigeria-owned companies should take up the challenge of producing
power and selling such. Many institutions are already currently doing this,
which is gratifying but many more should get into the mix. Therein lies the solution
to the power problem. Asking people to
pay more for services hardly rendered is fraudulent. (Source: Guardian)
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