The new electricity tariff introduced by the Nigerian Electricity Regulatory Commission (NERC) under the Multi-Year Tariff Order (MYTO) 2015, became effective on the 1st of February, 2016. Under the new tariff, residential customer category (R2) in the Federal Capital Territory, Niger, Nasarawa and Kogi states, served by the Abuja Electricity Distribution Company (AEDC) franchise, who previously paid N14 per kilowatt/hour, will now pay N23.60 per kilowatt/hour.
Similarly, residential customers in Eko and Ikeja electricity distribution areas will be getting a N10 and N8 increase respectively in their energy charges. The same situation applies to residential customers in Kaduna and Benin electricity distribution companies who will see an increase of N11.05 and N9.26, respectively, in their energy charges.
Many Nigerians have expressed discontent with the implementation of the new tariff. Some commercial and residential consumers are groaning under huge estimated bills, incessant power outages, lack of prepaid meters and ageing equipment, which has been associated with the Distribution Companies’ (DISCOs) neglect of the electricity sector.
Here’s what some Nigerians had to say
Welcome to Nigeria electricity bill is increased without an increase in the quality or with no electricity at all
— Idowu Temitope (@mz_temitee) February 2, 2016
— jay kug (@shotchafoe) January 30, 2016
The Nigeria Labour Congress Chairman, Ayuba Wabba, also voiced his dissatisfaction. “Congress considers as illegal, unfair, unjustifiable and a further exploitation of the already exploited Nigerians, the 45 percent increase in electricity,” he said.
Is the new electricity tariff justifiable?
The acting head of NERC, Dr. Anthony Akah, defended the new electricity tariff plan, saying the new tariff order, aside from eliminating fixed charges, has a mechanism to ensure that electricity distribution companies fully meter their consumers and eliminate “crazy” billing within one year. Although, the new regime comes with an increase in energy charges, all electricity consumers residential as well as commercial, will no longer pay fixed charges.
He further explained that the tariff covers a 10-year period with expectations that the prices will start reducing from between 2018 to 2024, when the sector must have advanced to a fully functional system that guarantees regular supply.
Also, the Minister of Power, Works and Housing, Mr Babatunde Fashola, has not been mute concerning the new tarriff as he has explained why Nigerians need to accept the new tariff. According to him, “…electricity is a product, it is made from raw materials; some of the raw materials are gas, power plants; they are also related. So, the issue of tariff is the single issue of price; when the raw materials of course go up, the price cannot stay the same.”