Drop plan to hike electricity tariff, MAN cautions

Director-General of the Manufacturers’ Association of Nigeria (MAN), Mr Segun Ajayi-Kadir, yesterday said that a higher electricity tariff would directly increase the cost of production for manufacturers.

He urged the Federal Government and Nigerian Electricity Regulatory Commission (NERC) to ensure improvement in electricity generation, transmission and distribution.

This, he said, would lead to regular electricity supply in the country, rather than increasing the tariff on the present 4000MW which was grossly inadequate.

Ajayi-Kadir told NAN: “Already, we have power constituting between 28 and 40 per cent in the cost structure of the manufacturing industry.

“So the impacts of the new tariff hike on the manufacturing industry will be intensive, particularly on metal processing, heavy machinery and chemicals manufacturing.

“A spike in electricity tariff will also erode the profit margin of the manufacturers and reduce their ability to expand operations and create new jobs.

“There is a high probability of the activities of small and medium-scale enterprises (SMEs) being paralysed with the proposed hike in tariff.

“There may also be a decrease in the revenue collectable by government, while manufacturers will ultimately pass the additional cost to the consumers of their products,” he said.

“Government should also ensure that at least 90 per cent of electricity consumers are metered to ensure consumption- reflective electricity bill payment.

Also, Mr Kehinde Aina, a consumer, said that it was improper to effect any hike in electricity tariff when an average Nigerian was still grappling with the hardship caused by the removal of petrol subsidy.

NAN recalls that NERC, through a recent public notice, said the request for rate review was premised on the need to incorporate changes in macroeconomic parameters and other factors affecting quality service, operations and sustainability of the companies.

NERC had stated in the notice that DisCos’ request for rate review was in pursuant to Section 116(1) and 2(a and b) of the Electricity Act 2023 and other extant rules.

Consequently, the commission invited the general public for comments on the rate review applications by the distribution licensees.

The Principal Partner, Utilities Consumers’ Rights Advocacy Initiative, Mr Shadrack Akinbodunse, said that there had never been corresponding performances from distribution companies (discos) to justify every new tariff regime.

Akinbodunse noted that the power supply had been getting worse since the privatisation of the sector due to what he called poor planning for expansion and failure to make timely provisions for obsolete equipment.

According to him, mass meter deployment, as promised by the discos during privatisation, had also become a mirage, while old and obsolete meters were not replaced, in disregard to an order by Nigerian Electricity Regulatory Commission (NERC).

“It’s a known fact that the Multi-Year Tariff Order (MYTO) pricing framework is essential to the survival of discos but it also goes with their corresponding performances to justify every tariff regime.