The Federal Government of Nigeria has suspended the hike in electricity tariffs across the country.
The Nigerian Electricity Regulatory Commission has ordered the suspension of the planned bi-annual adjustment in electricity tariff until the joint ad-hoc Committee concludes their discussion by the end of January.
The directive was contained in a statement by the Minister of Power, Sale Mamman, on Thursday, January 7.
Recall that on Monday, January 4, NERC issued a statement denying reports of an increase in electricity tariff by 50% but mentioned that rates for service bands have been adjusted by NGN2.00 to NGN4.00 per kWhr. Read here.
However, in a statement released today, The minister asked that the proposed adjustment in service rates should be suspended until after the meeting with stakeholder by the end of January.
“The public is aware that FGN and the Labour Centers have been engaged in positive discussions about the electricity sector through a joint ad-hoc committee led by the Minister of State for Labour and Productivity and Co-Chaired by the Minister of State for Power. Great progress has been made in these deliberations which are set to be concluded at the end of January 2021.
Some of the achievements of this deliberation with Labour are the accelerated rollout of the National Mass Metering Plan, clampdowns on estimated billing, improved monitoring of the Service-Based Tariff, and the reduction in tariff rates for bands A to C in October 2020 (that were funded by the creative use of taxes).
It should be clear to all that the regulator must be allowed to perform its function without undue interference. The role of the Government is not to set tariffs, it is to provide policy guidance and an enabling environment for the regulator to protect consumers and for investors to engage directly with consumers. Bi-Annual Minor reviews to adjust factors such as inflation are part of the process for a sustainable and investable NESI.
To promote a constructive conclusion of the dialogue with the Labour Centers (through the Joint Ad-Hoc Committee), I have directed NERC to forestall the implementation of the duly performed minor review (which adjusted tariffs between N2 per kWh and N4 per kWh) until the conclusion of the Joint Ad Hoc Committee’s work at the end of January 2021.
This will allow for the outcome of all resolutions from the Committee to be implemented together.”
The minister stressed that the information by NERC was misinterpreted by the general public and there was a need for the government to speak up and ensure sustainable growth in the electricity market.
“On the contrary, @NigeriaGov continues to fully subsidise 55% of on-grid consumers in bands D and E and maintain the life line tariff for the poor and underprivileged,” Mamman said.
Those citizens have experienced no changes to tariff rates from what they have paid historically (aside from the recent minor inflation and forex adjustment). Partial subsidies were also applied for bands A, B and C in October 2020. These measures are all aimed at cushioning the effects of the pandemic while providing more targeted interventions for citizens.
The Administration is committed to creating a sustainable, growing and rules based electricity market for the benefit of all Nigerians.
The Administration and the Ministry of Power will also continue to devise means to provide support for vulnerable Nigerians while ensuring we have a sustainable NESI.”