Hike In Fuel, Electricity Tariffs: Energy Expert Urges Labour, FG To Find Common Ground


…To Avert Industrial Action

  • Says Restructuring Of Electricity Sector Crucial For Sustainability

By Gbenga Abulude

As Labour Union, Civil Society Organisations (CSOs) and the Federal Government continue to lock horns over a proposed industrial action due to the recent hike in fuel price and electricity tariff, an egghead in the nation’s energy sector has observed that the country is faced with limited options now, since the Covid-19 pandemic has eaten into the nation’s income, causing a significant drop in revenues.

Executive Vice Chairman of Proton Energy, Mr Oti Ikomi, who was a guest analyst, on a CNBC Africa TV programme, Friday, said government and union leaders should find a common ground to avert the looming industrial action.

Recall that the recent meeting between the federal government, labour unions and CSOs over the recent hike price of fuel and electricity tariff, ended without a conclusive agreement.hike Fuel Electricity Tariffs, federal government,Nigerian Electricity Regulatory Commission

The hike in the electricity tariff from September 1, by the regulatory body, the Nigerian Electricity Regulatory Commission (NERC) from N30.23 to N62.33 per kWh and also the increase in price of petrol from N145 to N162 per litre were greeted by condemnations from Nigerians.

Organised labour and opposition parties in the country had lamented that the increment would bring untold hardship and deepen the purse of the poor, while accusing the government of being insensitive to the plight of the  people.

On Thursday, labour gave the federal government 14-Day ultimatum to reverse the price increase, threatening to embark on an industrial action if government fails to heed the call.

But Ikomi while responding to a question on electricity tariff regime, said he feels that the poor would not be affected as provisions were made for different bands of tariffs, preventing consumers who receive less than 12 hours of electricity in a month from being affected by the increase.

“We have limited options right now. Because of the pandemic, 65% reduction in our revenues, we have an $11 billion fiscal deficit, and we needed to find a way to plough the gap. The tariff increases have gone through extensive discussions between the Nigerian Electricity Regulatory Commission (NERC), Distribution Companies (Discos) and a set of customer forums. The summary that people indicated is that if they can see some improvements in the quality of the service. There is a willingness to ensure that appropriate remuneration is paid.

“One key element about this tariff so that people don’t get lost in the noise, there is 5 bands on the electricity tariff; A, B, C, D, E. The D & E are for the lower bands. If you have less than 12 hours of electricity a day, there will be no change in your tariff today.

“I believe most of the people that the unions are speaking for are not going to experience the increased tariff. The other day I had an informal poll in my office. I have already witnessed a significant increase in my tariff. But some of my staff said they have recharged their meters, they have not experienced any change. So we have to work with the facts. And the reality is that there is a bit of short term pay for long term gain. So the tariff enhancement changes are going on concurrent with the tariff changes,” he said.

According to Ikomi, the plan by the federal government to scale up power generation and transmission beyond the 4500mw and proper implementation of the Presidential Power Initiative — a massive restructuring — was in view in the sector. Ikomi appealed to  Nigerians to endure for a while for the gains of the future to materialise.

“There is also an ongoing effort to improve transmission and reduce losses which is Siemens Presidential Power Initiative deal. We also know that there is a recent effort to increase local production of meters and at the same time bring in 3 million meters so that the situation of unmetered customers and the apathy we have from subscribers is reduced. We are finally going to have a massive restructuring of the electrical industry in our country.

“Our appeal to the government and to the labour leaders is to ensure there is proper discussion, there is no time, they must sit together, engage and find a common ground,” he added.

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