Confusing signals emanating from electricity distribution companies (DisCos) in the country and the Nigerian Electricity Regulatory Commission (NERC) are keeping electricity consumers on edge.
Unsure of the conflicting signals from the regulator and the DisCos., many Nigerians are making panic bulk energy purchases.
Recall that on June 22nd, the Abuja Electricity Distribution Company (AEDC) announced that there would be an upward review of the electricity tariff effective July 2023.
The tariff increase, the company said, was influenced by the fluctuating exchange rate. The company also encouraged customers with prepaid meter to consider purchasing bulk energy units before the end of the month as this will allow them to take advantage of the current rates and potentially make savings before the new tariffs come into effect.
However, a few days later, NERC announced that it was yet to give official approval to a projected 40 percent electricity tariff increment by the electricity distribution companies.
While the NERC multi-year-tariff-order (MYTO) allows tariff review every six months while considering key variables like exchange rate, inflation and gas pricing, the regulator said it had not officially issued any directive on any tariff hike.
The tariff hike is coming at a time when the industrial sector is hoping to recover from losses and set to scale up production after eight debilitating years of economic downturn. The new tariff order will make it rethink its planned operations.
Nigeria’s Manufacturers Association of Nigeria (MAN) described the plan to increase electricity tariffs as outrageous. For most Nigerians, the proposed electricity price hike would be an unfair addition to the expansive and stultifying yoke of survival they face every day.
Already reeling under a sharp rise in the prices of essential commodities, households across the country will now need some further belt-tightening as they face a potential hike in domestic power tariffs – one of the steepest in the last five years.
The government’s reform of the unproductive foreign exchange regime has also seen the local currency fall steeply against major currencies. The government has also chosen to implement a 7.5 percent charge on Value-Added Taxes, VATs, on several consumable items.
While the NERC and DisCos continue to play hide and seek on the proposed tariff hike many Nigerians in the cities said they decided to buy more energy units because they knew the hike would take place despite the refutations. Investigation have shown that a lot of people in Abuja, Lagos and Benin said they ignored the denial of a likely tariff hike to buy bulk energy units.
