Minister of Power Directs NERC to Suspend Reviewed Electricity Tariff

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Minister of Power Directs NERC to Suspend Reviewed Electricity Tariff
Obiajulu Joel Nwolu

The minister of power, Saleh Mamman, has asked the Nigerian Electricity Regulatory Commission, NERC, to suspend the implementation of the reviewed electricity tariff.

The directive followed the approval by NERC on Tuesday for an increase in electricity tariff across the federation.

The minister in a statement issued on Thursday said the tariff review will be suspended until the conclusion of the joint ad hoc committee’s work at the end of January.

According to Mamman, the government had initially reduced the tariff of all categories of electricity consumers to help Nigerians cope with the impact of the COVID-19 pandemic.

He said, “Government 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. Those citizens have experienced no changes to tariff rates from what they have paid historically (aside from the recent minor inflation and forex adjustment),” he said.

“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 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, clamp downs 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 a 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.”

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.

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