The Association of National Electricity Distributors has described the new tariff, which becomes effective on Monday (today), as a necessary move that will attract investments into the power sector.The tariff increase is coming amid opposition from labour unions, with the Nigeria Labour Congress, Trade Union Congress of Nigeria and some civil society organisations vowing to picket electricity distribution companies across the country as a way of resisting the hike in electricity tariffs.
The Minister of Power, Works and Housing, Babatunde Fashola, however, said the new electricity tariff regime was the first major policy of the President Muhammadu Buhari administration.
The labour groups said the tariff increase could not be justified as there had not been any significant improvement in the services of the power firms.
The Executive Director, Research and Advocacy, ANED, Mr. Sunday Oduntan, said in an interview with our correspondent that the country could not see improved power supply under the current tariff regime.
He said, “If you want an improved service, we have to have a cost-reflective tariff. The required huge investment cannot happen without us having an appropriate pricing. That is the issue. We have been under-selling for a long time, and you can’t be selling a product that is supposed to be N100 at N60 and people are expecting improvement; that business will collapse.
“So, it is not about us increasing tariffs, it is about reviewing the tariffs upward to meet the operational cost of the business so that we will not continue to be in darkness perpetually.”
Oduntan had at a briefing on Friday noted that the Discos, acting as collection agents in the sector, could only retain 25 per cent of the money they collected from customers, while the balance is usually shared among the generating companies, gas suppliers, the Transmission Company of Nigeria and the regulators.
“The journey is a long one, and the tariff is a critical part of that journey. We are not saying it will solve all the problems, but we are saying without it, we can’t get to the destination,” he added.
