Again, FG Increases Electricity Tariffs as Darkness Persists

2

By Emmanuel Addeh

The federal government has, again, increased the tariffs paid for electricity by Nigerians, this time by about 50 per cent, despite the severe blackouts and power outages in the country.

Announcing the development in an order copied all the distribution companies (Discos), the Nigerian Electricity Regulatory Commission (NERC) said it was embarking on the hike considering the changes in inflation rate, foreign exchange, generation capacity and gas prices, among others.

The latest increase comes about four months after the last one, which was sternly but unsuccessfully opposed by organised labour, prompting a temporary suspension, which finally led to negotiations that did not yield much.

In a revised Multi Year Tariff Order (MYTO) signed by the new Chairman of NERC, Mr. Sanusi Garba, and Commissioner, Legal, Licensing and Compliance, Dafe Akpeneye, on December 31, 2020, the memo indicated that the new tariff increase took effect on January 1, 2021.

It noted that the latest order, NERC/225/2020, supersedes the previous Order NERC/2028/2020.

According to the NERC, the factors taken into consideration were: “14.9 per cent inflation rate rise in November 2020, foreign exchange of N379.4/$1 as of December 29, 2020, available generation capacity, US inflation rate of 1.22 per cent and the Capital Expenditure (CAPEX) of the power firms.”

The order also covers the rate of increases expected to be paid by Nigerians between now and 2024, with a unit costing as much as N74 by then.