Labour, Discos on Collision Course over Likely Electricity Tariff Hike

The Nigeria Labour Congress, power distribution companies, and the Nigerian Electricity Regulatory Commission are heading for a collision course over the planned hike in the tariffs payable by electricity consumers nationwide.

Although power distribution companies and the NERC have not officially confirmed the planned increase, the Multi-Year Tariff Order of the regulator, which explains tariff reviews in the sector indicates that electricity tariff is meant to be reviewed every six months.

This implies that the tariff being paid by power users currently, will be reviewed and a new tariff will take effect from July 1, 2023. In reviewing the tariff, based on MYTO, the NERC considers various economic factors. They include inflation rate, foreign exchange rate, available power generation capacity, gas price, and, capital expenditure adjustment.

Operators project that the high rate of inflation, coupled with the recent floating of the naira against the dollar, among other factors, will lead to an estimated rise of about 40 per cent in electricity tariff by July 1, 2023, should the MYTO be implemented.

Reacting to this, the NLC, on Thursday said the plan to increase electricity tariff by 40 per cent by July 1 “was both insensitive and callous and reflects an organised indifference to the wellbeing of consumers, especially, the poor ones.” With this in mind, the NLC has advised the Government against considering such impending upward review of electricity tariffs in the country.