Despite the epileptic power supply that has crippled many businesses in the country, the Federal Government recently announced an increment in electricity tariffs to be effective from June 1, 2012. CHIKA OKEKE reports that Nigerians are set for a nationwide showdown with the government.
Barely five months after the nationwide protest that followed the removal of petroleum subsidy, Nigerians are bracing up for yet another round of national protest.
This time, to resist the Federal Government’s new electricity tariff, which comes into effect on June 1, 2012.
The Federal Government kick-started yet another power reform process that is likely to upset the already tensed political atmosphere, with the various agencies in charge of the power sector planning to officially review the electricity tariff.
This is coming barely five months after the January 2012 protest against the removal of fuel subsidy which almost crippled socio-economic activities in the country. while expressing fear over the new tariff regime,President Jonathan had earlier before the National Economic Council (NEC) meeting, said he hoped it would not lead to another nightmare the way he was tormented by the fuel subsidy removal crisis in January. He therefore directed that Nigerians should be properly sensitized on the proposed increase to avoid any protest.
Meanwhile, as the masses await the introduction of the new tariff regime, governors of the 36 states of the federation recently unanimously assented to the increase during the NEC meeting at the Presidential Villa, Abuja.
Governors assent to electricity tariff increase
The NEC meeting was presided over by Vice President Namadi Sambo with the Central Bank of Nigeria (CBN) Governor and all states governors in attendance.
Addressing jounrnalists after the meeting, Anambra State Governor, Peter Obi said the takeoff date for the new electricity tariff remains June this year.
“Nigerians may be warming up to fight the increase of tariff because already, they have been paying for what they have not consumed. All these things will end. There is going to be a decrease and increase. There will be a decrease for the low users and the poor people within the cities and the rural areas, and there will be increase for the high users,” Obi explained.
“But in the end, nobody is going to invest like they are investing in Ghana, in Chad and everywhere. Unless we do something, because if you are a businessman and you are being asked to put money where you are going to lose money, you are not going to do it.
Overall, if we get the power issue right, Nigerians will pay less than 20 per cent of what they pay today generating their own power. And we want to ensure that, like the metering mentioned, there will now be accurate metering and no longer estimated metering,” the governor assured.
TUC criticises tariff plan
However, the President of the Trade Union Congress (TUC), Peter Esele, in Abuja at a meeting with top government functionaries that included the Minister of Power, Prof. Barth Nnaji, rejected the proposal.
Esele frowned at the haste with which the Federal Government was going about the implementation of the new electricity tariff regime. He argued that without improvement in the power sector, the government should not burden the already impoverished masses.
Also the Chairman of TUC in Rivers State, Comrade Hyginus Chika Onuegbu, has also criticised NERC’s decision to increase the tariff, adding that consumers are made to pay for electricity they did not consume.
Onuegbu, who disclosed this during the union’s 2012 award night, added that, “the current increase in the tariff by NERC is very unfair to the Nigerian people, because in that tariff, there is a fixed element and those are some of the things that we are surprised at, about increasing the NERC tariff. The element of the charges cannot be justified,” he lamented.
NERC explains tariff
The Nigeria Electricity Regulatory Commission (NERC) Commissioner-in-charge of Government and Consumer Affairs, Mr. Abba Ibrahim, however assured that the new electricity tariff, being a well thought process by NERC in consultation with all stakeholders, will improve power generation and distribution nationwide.
The commissioner was reacting to series of protest to the announcement by the Federal Government that a new structured tariff would be rolled out come June 1.
While explaining to LEADERSHIP SUNDAY the structure of the new tariff, Ibrahim said, “For this year, the Federal Government provided N50 billion for the subsidy, which is channelled mainly at reducing the tariff of rural dwellers and urban poor. They are categorized under the tariff structure of R1 (residential R1), because most of these rural dwellers and urban poor consume not more than 50 kilowatts/hour per month.
So anybody consuming 50 kilowatts/hour or less per month will enjoy the subsidy... We have made it in such a way that the rich can also cross-subsidise this group of power consumers.
“The new tariff for R1 is N4:00 per kilowatt/hour which was arrived at based on their social classification. They are not going to pay any fixed charge, and we have also abolished PHCN practice of collecting meter maintenance fee.
So if someone on R1 Class is prudent in using electricity, the person will eventually pay less than what he`s paying now, as long as there is no such practice of leaving lights on in the afternoon when they don’t need it.
“Another is R2 where 80 per cent of Nigerians fall under; that is residential category R2. In this category, they do not also pay the meter maintenance fee and enjoy some subsidy, but not the same amount of subsidy as the R1 Class.
The new tariff varies from location to location. And since we have 11 distribution companies across the country, each distribution company has its cost profile. You don’t expect the cost of doing business in Sokoto to be the same as in Port Harcourt.
“The variation for the R2 Class is not too much, because currently in Nigeria, everybody pays N10. But with the new monthly tariff order, the R2 Class pays N11 per kilowatt/hour and in some places, they can pay up to N14 per kilowatt/hour,” the commissioner said, explaining to LEADERSHIP SUNDAY that “the higher class is the R3 because some rich people have their own dedicated transformers, and they have a higher tariff. The highest in the residential category is R4, which is also served with at a dedicated transformer like the R3.”
The commissioner said the residential R1 will not pay any fixed charges, while the residential R2 will pay N500 fixed charge.
The residential R3 pays about N18,000, while R4 pays between N100,000 and N113,000 per month.
While giving the breakdown on commercial tariff, he explained that all those operating small businesses like the artisans (hairdressers, welders, and barbers) are classified as commercial C1.
“They also have been subsidized and will pay a minimal fee of N500 as fixed charge and they will also enjoy the element of the cross-subsidy. We also have the larger commercials like the C2 and C3,” he said.
In the industrial classes, he said, “We also have the D1, D2 and D3. The D1 are the light industries. They also have some elements of subsidy, while the heavier and bigger industries like the D2 and D3 have higher tariff and higher fixed charges.”
The NERC has as well classified some other sectors into the special category group. “We have special categories like S1, S2 and S3. Under this special category, we have places of worship like churches and mosques, schools and hospitals.
Finally, is the streetlight, which is also beneficial to everybody, but somebody has to pay for it. And we also have a special tariff for the streetlight? Usually, government pays for it, but it’s subsidised because it’s a social service and it also enhances security in the neighborhood.”
Nigerians kick against the new tarriff
Speaking earlier this month, the former House of Representatives committee chairman on information, Hon. Dino Melaiye, while addressing journalists in Lagos vowed to mobilise Nigerian youths to protest the increase.
He said: “Why will you increase the tariff on a sector that is not available? How do you increase tariff on a commodity that is sick? We will do everything possible to vehemently resist it. We will make this country ungovernable within the confines of the law. We will support increase in tariff when there is uninterrupted power supply. We will support increase when we have 10,000 megawatts.”
Public Interest Lawyers League (PILL) President, Abdul Mahmud, in his condemnation said: “The hike, coming five months after Nigerians overwhelmingly rejected the removal of oil subsidy and six months after the commission abandoned its initial plans to increase electricity tariff, is a declaration of war on the suffering masses of our people.”
“There is nowhere in the world where such inimical hike can be justified by regulators who seek to expand electricity generation and distribution capacity through revenues generated by consumers, and delivering no tangible services to the consumers. And to increase tariff simply because the regulators want to make the domestic electricity market attractive is nonsensical.”
Also, a stylist at Kuje, Madam Patience Uwah, added her voice to the protest thus: “Not too long, the government removed the (fuel) subsidy, now they want to increase the electricity tariff. I have heard some people say that they will protest, and whenever they start, I will also join them because it affects me too, directly or indirectly.
My prayer is that God should give our leaders the vision to govern this country with the fear of God, because things are getting more difficult everyday and poor man must survive.”
An electrical welder at Wuse Zone 5, Mr. Goddey Ibeh, said: “We are not happy about the news, because the artisans do not get enough customers again due to shortage of power supply.
Even as there is no steady work, we are still receiving bulky bills at the end of every month. Yet, we comply but we don’t see the light. What we are paying for already is too much, and one cannot make up to the amount every month.
Mrs. Adejoke Adejumobi sells frozen food at Federal Housing Estate, Lugbe, and lamented the power supply in the estate.“...If you rely on NEPA to do any business in this estate, it will be a flop. The only means of freezing the foods is with the use of generator, which is almost sinking my business.
When will this country begin to get things right”, she inquired. “Is it not better to arrest the past leaders who have in one way or the other contributed to series of problems we have in the power sector? Well, my candid advice is that this issue may lead to another nationwide strike... Nigerians are just paying for services that are not beneficial to them.”
For Miss Magarita Sunday, a student at Nasarawa State University, Keffi, “Nigerians are in trouble again. Why should the Federal Government and NERC conspire to increase the electricity tariff, when they have failed to improve power supply across the country? Is it not shameful?” she said.
“If an industrialist should pay more for electricity, he will definitely transfer the bulk of the cost to the consumers, because the price of such products will increase astronomically,” a producer of sachet and bottle water at Lugbe, who pleaded anonymity, said. “We have been informed that the electricity tariff will be increased, but the funny aspect of it is that we don’t even use NEPA light for our machines.
They have failed in their duty of providing steady power supply to Nigerians despite all the money invested in the power sector.
We buy diesel everyday and it costs us so much. So if they want to increase the tariff, maybe the price of sachet water in Abuja will go as high as N20.”