Eberechi Obinagwam
Following the recent hike in Tariff, National Union of Electricity Employees (NUEE) has said it will affect the general public the most because they are the end users.
In a statement signed by the general secretary, Dominic Igwebike titled: ‘Hike in Electricity Tariff – Danger looms’ said the general public are the customers and end users of Band A products and services, saying that the additional costs will be transferred to the common man, so they are indirectly being exploited, notwithstanding their dwindling purchasing power and increasing impoverishment.
The union said as one of the critical stakeholders in the electricity sector, it has been a major concern to see the delivery of constant, sustainable, clean, and affordable Electric Power to the nation.
According to the statement, there has not been any meaningful improvement since after the privatization of the Power Sector, adding that the country has an installed capacity of about 14,000MW but generates about 4,803MW, meanwhile, Nigeria needs at least 30,000MW to reach sufficiency.
It said, the recent hike in electricity tariff from N68 /kwh to N225 /kwh is absurd in a country where the majority of the masses are grappling with basic survival and an electricity access rate of about 55%.
The justification given by NERC, he said, is that the hike is attributed to only Band A consumers who make up only 15% of electricity consumers and utilize 40% of the nation’s electricity consumption. It says, it begs to understand the sensibility of the person(s) that uttered such a statement purporting that it would not affect the general public.
“They need to answer these questions: Who are the Band A consumers? What do they do? Who are the customers of the Band A consumers? Who bears the brunt of the electricity hike?, ” the statement queried.
However, NUEE gave scenarios of how the hike in the electricity Tariff will grossly detrimental to the economic diversification, growth, and well-being of Nigerians as fellows
“1. Company A, uses 1000 kwh of energy in manufacturing and works for 24 hours a day, with the current hike, his daily energy cost will increase from N50,592,000 to N167,400,000 which is an additional direct cost of N116,808,000 i.e 231% not to mention the increase in the cost of their inputs as the costs of those will also be increased by the producers to accommodate their own increase. The price of Company A in Band A products will go up by about 300% and those in Band Z where there is no transformer will buy at the increased price. If they buy at a higher price, they are the ones paying the almost 300% increase, not the manufacturer purported to be taxed,”
“2. Company B, increased the price of their products in line with their new economic reality, consumers don’t have the purchasing power to buy at the new rate, Company B will close down. As Company B closes down, some of its peers facing the same economic challenge will follow suit, and then unemployment will increase. If that happens, insecurity will be on an upward trend, then the government will spend more than the money made in fighting insecurity which we haven’t been able to get hold of,”
“The increased cost of goods will make Nigerian-produced goods unattractive as imported and smuggled items will be far cheaper than it. People will resort to those goods, thereby fueling the economy and employment situation of the countries of import. Our manufacturing and business sectors will become comatose,” the statement explains.
He said it is with this reason that the US, UK, France, Germany, and all developed economies support their factories with billions invested in power subsidies.
“Why is Nigeria different? Electricity in Egypt is an average of N21.68 per kwh, and in South Africa, it is N226 per kwh. The minimum wage in Egypt is N78,360 while in South Africa it is N328,395. The minimum wage in Nigeria is N30,000 while the new electricity tariff is N255 per kwh. A country that genuinely has the interest of its people at heart and wants to grow will ensure that the real sector is given the most support it can get not putting a nail in its coffin.
He noted that the safety of their members is at stake, as they are at risk of being attacked by people in the community when they visit for disconnections of light.
“The Minister of Power and NERC did not consult with the stakeholders in the sector before the increase. The Minister of Power has relegated himself as the spokesperson for the DISCOs where he is justifying Cost Reflective Tariffs. What of Service Reflective Tariffs as it relates to consumers? We as a stakeholder don’t know the Energy policy of this present administration,”
“As a critical stakeholder in the Power Sector who is concerned with Nigerians getting constant and affordable power supply, we state categorically that the hike in the electricity tariff is not beneficial to Nigerians and should be withdrawn,” he said.