The removal of petrol subsidies and the fluctuating naira exchange rate have been described by experts as twin decisions complicating the Nigerian Electricity Regulatory Commission’s (NERC) 2022 Multi-Year Tariff Order (MYTO).
Despite challenges faced by power sector players in meeting the target of supplying at least 5,000 megawatts annually, the commission’s current Service Based Tariff (SBT) was set based on an exchange rate of N441/$ and inflation of 16.97%.
In 2015, the average tariff stood at N25 per kilowatt-hour, climbing to N60 in 2020 and further to N64 in 2022 under the MYTO. Notably, the exchange rate used in determining tariffs rose from N198.97/$ in 2015 to N441.78/$ in 2022, with inflation rates increasing from 8.3% in 2015 to 16.97% in 2022.
With the current inflation rate at 31.70%, experts project it could hit 35% by June, exacerbating economic challenges faced by Nigerians.
Civil Society Organizations (CSOs) have expressed deep concern over reports suggesting a potential tripling of electricity tariffs by the federal government.
Executive Director of the Resource Centre for Human Rights and Civic Education (CHRICED), Comrade Ibrahim M. Zikirullahi, criticized the proposed tariff hike, highlighting its impact on millions of Nigerians already pushed into poverty due to the removal of fuel subsidies.
Zikirullahi warned of potential mass protests and social unrest if the government fails to address mounting tensions and economic hardships.
Similarly, Gad Peter, Executive Director of the Cleen Foundation, expressed surprise at the proposed increase, especially considering previous shelving of discussions due to public outcry.
Peter emphasized the need for the government and electricity distribution companies to be more sensitive to the plight of Nigerians, particularly amidst inconsistent electricity supply and high fuel prices.
Efforts to obtain the official position of organized labor from Nigeria Labour Congress (NLC) President Joe Ajaero were unsuccessful, as calls and messages went unanswered. Likewise, attempts to reach the Head of Information at NLC Headquarters, Benson Upah, were unsuccessful.
