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Special adviser to the president on infrastrure, Ahmed Zakari has said that electricity distribution companies (DiscCos) will resume implementation of the new electricity tariff next week.
A news service-based reflective tariff (SRT) structure was implemented on September 1 by the DisCos after approval by President Muhammadu Buhari.
The new tariff was halted after the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) kicked against the hike.
The organised labour called for a nationwide strike to protest the new electricity tariff and the hike in petrol pump price.
However, the strike was suspended at the eleventh hour after the organised labour reached an agreement with the federal government to suspend the implementation of the new tariff pending the findings of a committee to access the increase.
Zakari who spoke at the 51st virtual power dialogue organised by Nigeria Electricity Hub in Abuja disclosed that the federal government has reached an agreement with the NCL and TUC to review the tariff of some categories of electricity consumers downloads.
He said that the electricity market will be overburdened if there is no transition to a market-based regime with transparency in the collection of revenues by the DisCos.
He said, “Remember that 55 per cent of on-grid consumers are still 100 per cent subsidised. The N31 on average per kilowatt per hours for band D and E were paying before SRT, they will continue to pay. Only 45 per cent of the on-grid population was affected. And with the agreement with labour, we are now going on to take out an additional 30 per cent from band C in terms of what they were supposed to pay,” Zakari said.
“That increase will be reduced by 30 per cent and then there will be a 10 per cent reduction in A and B.
“Hard decisions are not always popular. But we are going back to SRT with the reduction agreement that we have with labour and we are going to make this market work.
“That government/ labour agreement was two weeks ago, but the government actually had refused to implement it because it wanted to provide additional palliatives at this difficult time.
“What we have done through the banking sector, all the Discos collections are being monitored and we will deduct VAT and taxes for the government and then the loans from the central bank and then pass down the balances to the Discos.
“There’s full transparency. If there’s N5bn in the account, we are going to take the market money and the debts and then give the Discos the balance. They will have a facility that enables them to wrap up slowly and the 63 per cent minimum remittance. There’s an Opex and Capex loan made available.”
This post was written by Obiajulu Joel Nwolu.
The views expressed here belong to the author and do not necessarily reflect our views and opinions.