Tariff Increase: Experts urge FG to begin mass metering to ease consumers’ suffering
By Yunus Yusuf
Some experts in the power sector have urged the Federal Government to begin installation of the pending five million metering to households under the National Mass Metering Programme (NMMP), to reduce the suffering of Nigerians.
Some of them who spoke in separate interviews with the Business Intelligence on Tuesday in Lagos said that the Multi-Year Tariff Order ( MYTO) had already stipulated that a major review and a minor review of electricity tariffs should be done yearly.
It would be recalled that Nigerian Electricity Regulatory Commission (NERC), set to increase electricity tariff by 40 per cent by July 1 under MYTO.
Mr Adetayo Adegbemle, Executive Director and Convener, PowerUp Nigeria, said the NMMP, under the last administration, was supposed to cushion the effect of subsidy removal from the electricity tariff, but failed to meet its target.
Adegbemle said that it would be a great opportunity if the current administration could immediately set about installing the pending over five million meters promised to consumers to ease the suffering of Nigerians.
According to him, the upcoming increase in July is already encoded in the MYTO that NERC follows.
“So for some of us, it is expected.
“The only challenge that I have is that NERC that should be communicating with Nigerians are not.
“Next step would be to redesign our tariff setting approach.
“The MYTO over the years has been heavily dependent on inflation and foreign exchange benchmark against dollars.
“We should not base our tariff against factors that we do not have any control over,” he added.
Mr Sina Odugbemi, National Coordinator, Where ls The Light, said, “It is not difficult to conclude as long as the steps taken right from the beginning of privatisation have purely profit oriented.
“It does not appear that the DisCos are in anyway interested in improving on services.
“By now 90 per cent if not all subscriber ought to have been metered. Rather the DisCos have continued to exploit subscribers with exploitative estimated billings amid poor services.
“Sadly, there has not been remarkable improvement in power supply in many areas,” he said.
Odugbemi said the planned 40 per cent increase in tariff, coming on the heels of astronomical hike in price of fuel, would be double jeopardy.
He said that it an ill wind that can only deplete the social economic activities.
Odugbemi said government must move to avoid the harsh effect on the people.
“Government must realise that this not a good time to slam this tariff hike on already decimate mass of the people.
Mr Ayodele Oni, Partner, Bloomfield Law Practice, said in pursuant to NERC’s MYTO, there is supposed to be a minor review which could be upward or downward.
Oni said that the review of electricity tariffs every six months, taking into consideration a number of macro-economic and other indices including the consumer price index, forex, gas price etc.,
“It is, thus, expected that there would be a price review in July, 2023.
“It is not strange, considering the changes in the relevant macroeconomic situation, that the percentage increase could be up to 40 per cent.
“However, the government does need to take steps to ameliorate the adverse impacts on the populace,” he said.
Oni said that a reality with the recent changes in macro-economic parameters, including the new directive to float the Naira against the US dollar and other international currencies, is that many sectors including power.
He said that electricity tariff would be affected by the new average exchange rate in the market.
“In determining the tariff, inflation rate and exchange rate are part of the indices for setting the tariff.
“Hence, it is not surprising that there would be a noticeable increase in the tariff.
“Whilst, this is one of the realities of the situation in the country, the government would still have to find ways to cushion the effect of the changes on Nigerians,” he added.
Oni said that an increase of up to 40 per cent at this time is quite high.
He said that government needs to consider palliatives for Nigerians to cushion the general effect of the economic situation in the country.
“Also, on this point, we need to apply a graduated increase rate to each band/class of electricity customers.
“With the lower bands having lesser increase rate. It would be unfair for the lower bands to also have up to 40 per cent as well.
“In fact, better access to meters can be an option to cushion the effect of the increase.
“There is also the need to improve overall supply and educate the populace on energy efficiency/savings,” he explained.
