The organized Labour and the foremost trade sector group, Lagos Chamber of Commerce and Industry (LCCI), on Tuesday warned that the 100 percent hike in electricity tariffs will hurt the economy.
The new tariffs hike was approved by the Nigerian Electricity Regulatory Commission (NERC).
The NERC granted permission for the 11 Distribution Companies (DisCos) to raise the rates with effect from July.
The last hike in tariffs which began on November 1, last year almost led to a nationwide strike by organized labour.
The NERC said on Tuesday: “In compliance with the provisions of the Electricity Power Sector Reform Act (ESPA) and the nation’s tariff methodology for biannual minor review, rates for service bands A, B, C, D, and E have been adjusted by N2.00 to NG4:00 per kW/hr to reflect the partial impact of inflation and movement in foreign exchange rates.”
Organized Labour vowed to resist the hike because it is at variance with the agreement reached with the Federal Government last year to halt the increase in tariff.
A meeting of the sub-committee on electricity tariffs to review the progress made in the ongoing discussions in connection with the November hike in rates is billed for January 25.
Chairman of the seven-man committee and Minister of State for Labour and Employment, Festus Keyamo (SAN) said: “What NERC has done is against what we agreed upon at the level of the committee. So I can say I was not consulted, members of the committee were not consulted because we spoke with each other this evening.
“What I said earlier was the actual position of the committee. What NERC has released now is not actually reflective of what we decided at the committee level.
“We are trying to fix a meeting for Thursday to find out exactly what happened and to take it up from there, but I can assure you that we will soon come out with a statement to show the true position of things but what we did at the level of the committee was not to increase the tariff but to adjust certain tariffs from one band to another.
“We removed certain tariff from one band and used it to cushion some other bands.”
A document obtained in Abuja yesterday showed that the Commission had approved an upward tariff review for the Ibadan Electricity Distribution Company (IBEDC). A careful study of the tariff order shows that the power distributor has to operate the previous tariff of 1st September 2020 till June 2021. Although the new commission’s order NERC/2028/2020, which disclosed this in its revised Multi-Year Tariff Order (MYTO) minor review, said the tariff takes effect from January 1, 2021, the document sighted yesterday, showed that the increase will take effect in July. The rates remain unchanged till June.
The company said from Band A, the None Maximum Demand customers that are N62.33 per kilowatt till June 2021 will from July 2021 pay N68.83 per kilowatt. Meanwhile, in the same Band A category, Maximum Demand customers that are now paying N61.54 per kilowatt will pay N63.79 per kilowatt. For Band B, Non-Maximum Demand customers who pay N58.39 per kilowatt till June 2021 will pay N65.71 from July 2021.
The Maximum Demand customers in the same band B that are now paying N57.33 per unit will pay NN64.52 by July 1, 2020.
President of the Nigeria Labour Congress (NLC) Comrade Ayuba Wabba and President of the Trade Union Congress (TUC) Quadri Olaleye warned that the new tariff regime would worsen the economic situation in the country and lead to workers lay-off.
Wabba said: “This is condemnable and I think there is some element of deceit in it. Because you remember that there is a standing committee of the federal government which NERC is part of, still working on how to be able to address the issue of arising from the last hike.
“Basically we are going to resist it and Nigerians must also stand up to resist it because it is like exploitation.
“It means that this exploitation will not have an end and when you look at the variables it is even laughable. You are looking at the variable of inflation and the variable of the exchange rate which is supposed to be part of the responsibility of the government to fix.
“Government ought to fix our economy and bring the exchange rate to the lowest level same also with inflation and therefore is transferring the inefficiency in our system to the consumers. I think the implication will be very severe.
“I am sure most of our manufacturers, both small and medium scale, will not be able to afford all of this. They have been crying and the implication is that there will be some lay–off.
“It will also affect the diversification policy and certainly I think it will further impoverish Nigerians.”
President of TUC, Olaleye, and its Secretary-General, Comrade Musa-Lawal Ozigi, wondered why the federal government espouses unfriendly policies that are capable of crippling the economy.
Their statement reads: “The TUC is disappointed by the recent hike in electricity tariff done (yesterday) by the Federal Government while negotiations are ongoing with the organized labour on the last hike that became effective from November 1, 2020, because of the untold hardship it has brought on the workers and Nigerians as a whole.”