NLC Not in Support of FG Proposed 40% Electricity Tariff Increase

Members of the Nigerian Labour Congress (NLC) have come together to stop the Federal Government from the proposed increment placed on electricity tariffs which is expected to start on July 1, 2023.

It was made known in the statement signed by the NLC President, Joe Ajaero on June 22. The statement rejects the plan thereby condemning the implementation of a 40% electricity tariff increase as heartless and insensitive. 

The NLC in the statement went on to say that the proposed increase by the FG clearly demonstrates an act of carelessness and disregard for the welfare of her citizens, particularly those living below average due to economic downtimes.

In the statement released by the NLC, the group pointed out specific figures that should make the FG reconsider the increase in electricity tariffs. The country has an inflation rise of 22.41% recorded in Q1 2023 and a change in exchange range from N441 to N750. All these are enough reasons for the government to be considerate of the citizens. 

However, the NLC claims that even with these details, the proposed tariff rise failed to explain itself, stressing that cost and quality of service should take the lead over market reasoning.

The NLC also criticizes service providers for failing to fulfill the 5000 MW benchmark despite getting different kinds of intervention.

The NLC also expresses worry about covert tariff increases without previous warning, which not only violates regulations but also poses a serious danger by implying a lack of control. This might impose new prices on consumers as early as August.

Additionally, the NLC warns that if other companies adjust their pricing or rates, ordinary Nigerians will face the brunt of these cumulative financial pressures, eventually leading to extreme problems.

According to the NLC statement, Nigeria is becoming a society where everyone is out for themselves and there is little regard for others.

The NLC expressed worry about the numerous other charges and taxes that Nigerians must bear. The following was part of the statement:

THE STATEMENT FROM THE NLC REGARDING THE PROPOSED INCREASE IN ELECTRICITY TARIFF BY THE FEDERAL GOVERNMENT

“The massive increase is explained away as a response to the over 100 per cent increase in the pump price of premium motor spirit (PMS).

“Details reveal a movement in inflation from 16.9 per cent to 22.41 per cent (threatening to needle 30) and a shift in the exchange rate from N441 to N750 (per Dollar). We believe not even these figures are a justification for this reckless proposed tariff increase.

“The issue of capacity to pay and quality of service delivery is not only germane but superior to any rationalization by market logic.

“The service providers, despite sundry support, have not been able to meet the threshold of 5,000 megawatts.

“Coupled with this, there have been surreptitious increases without notice in violation of statutes.

“The inherent risk in the new regime of tariff is that there is no control, implying that by August, consumers will pay new rates.

“The other risk is that by the time other products or service-rendering entities come up with their new prices or rates, the ordinary person would have been compacted into dust.

“We would want to advise apostles of the Market who have called NLC all sorts of names to check their conscience.

“The rate at which they are going is highly combative and combustible. With the contemplation of payment of school fees in tertiary institutions and increases in privately-owned ones in addition to other costs/tariffs on the way, life in Nigeria could truly be Hobbesian,” the statement partly read.

According to the NLC, the market economies, which the market fundamentalists seek to emulate, have in place socio-economic safeguards which Nigeria does not have and in light of this, “the proposed tariff hike should be shelved for the collective safety of Nigerians.”

TAKE HOME

According to the National Bureau of Statistics (NBS) Q1 2023 Electricity Report, the number of metered consumers in the country increased to 5.31 million during the highlighted period.

This signals that tariff revisions are on the way. Meanwhile, distribution businesses reported an impressive revenue increase, with N247.33 billion collected in the highlighted period, representing a 20.81% increase over the first quarter of 2022.