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New electricity tariff kicks off next week

The suspended implementation of the new electricity tariff is to begin next week.

This was said by Ahmed Zakari, special adviser to the president on infrastructure, according to him, the electricity distribution companies (DisCos) will resume the implementation next week.

The implementation of a new service-based reflective tariff (SRT which was to begin on September 1 was suspended after the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) protested the new tariff and called for a nationwide strike.

However, after meeting with the federal government delegation a few hours to the protest the unions suspended the proposed strike after brokering an agreement to halt the electricity tariff increase.

Zakari said in Abuja during the 51st virtual power dialogue organised by Nigeria Electricity Hub that the federal government has sealed a deal with organised labour to review the tariff of some categories of electricity consumers downwards.

He noted that the electricity market may collapse if there is no transition to a market-based regime with transparency in the collection of revenues by the DisCos.

According to him,  “Remember that 55 per cent of on-grid consumers are still 100 per cent subsidised. The N31 on average per kilowatt per hours for band D and E were paying before SRT, they will continue to pay. Only 45 per cent of the on-grid population was affected. And with the agreement with labour, we are now going on to take out an additional 30 per cent from band C in terms of what they were supposed to pay.”

He added that “That increase will be reduced by 30 per cent and then there will be a 10 per cent reduction in A and B. But I promise you next week on the headlines if we resume service based tariff, what everyone will be saying is that government has increased tariff for everybody and that’s because there’s a vibrant urban population that consumes the headlines. But we are committed to doing the right thing.

“Hard decisions are not always popular. But we are going back to SRT with the reduction agreement that we have with labour and we are going to make this market work.

“That government/ labour agreement was two weeks ago, but the government actually had refused to implement it because it wanted to provide additional palliatives at this difficult time. You can quote me that this was supposed to have taken off two weeks ago.

“What we have done through the banking sector, all the Discos collections are being monitored and we will deduct VAT and taxes for the government and then the loans from the central bank and then pass down the balances to the Discos.

“There’s full transparency. If there’s N5bn in the account, we are going to take the market money and the debts and then give the Discos the balance. They will have a facility that enables them to wrap up slowly and the 63 per cent minimum remittance. There’s an Opex and Capex loan made available.”

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