The Nigeria Labour Congress (NLC) has strongly criticized the Nigerian Electricity Regulatory Commission (NERC) for its plan to implement a 40 percent increase in electricity tariffs starting from July 1, 2023. The NLC described the tariff increase as insensitive and callous, showing a lack of concern for consumers, particularly those in lower-income brackets.
NERC had justified the tariff increase by pointing to the exchange rate and inflation rate. The current service-based tariff (SBT) was based on an exchange rate of N441/$ and an inflation rate of 16.97 percent. However, due to the devaluation of the Naira and the higher inflation rate, NERC argued that an increase in tariffs was necessary to offset the operational costs of electricity providers.
Comrade Joe Ajaero, the President of NLC, expressed dissatisfaction with the proposed tariff hike. He emphasized that the capacity to pay and the quality of service delivery should take precedence over market justifications. Ajaero also highlighted the lack of control in the new tariff regime, suggesting that consumers could face even higher rates by August. He warned that the cumulative effect of rising prices across various sectors would place a heavy burden on ordinary Nigerians.
Ajaero urged those advocating for market-driven policies to reassess their stance, noting that market economies with similar policies have safeguards in place to protect vulnerable groups. He called for the proposed tariff increase to be postponed in the interest of collective safety.
In response to the announcement, the Abuja Electricity Distribution Company (AEDC) appealed to its customers to disregard the planned tariff increase, stating that no approval had been received for the increment. AEDC assured customers that they would be informed of any changes and apologized for any inconvenience caused.
It is important to note that the MYTO 2022 guidelines, which govern the regulation of electricity prices, allow for periodic revisions based on factors such as exchange rates and inflation. AEDC had earlier indicated that there would be an upward review of tariffs from July 1, citing the fluctuating exchange rate. The company advised customers with prepaid meters to purchase energy units before the end of June to take advantage of the current rates.
Overall, the NLC has expressed its strong opposition to the proposed electricity tariff increase, emphasizing the need to prioritize affordability and service quality. The issue highlights the ongoing concerns and challenges surrounding electricity pricing and accessibility in Nigeria.
