Organized labor fight against new electricity tariff hikes for urban customers. The Nigerian government, through the Nigerian Electricity Regulatory Commission (NERC), has announced a big increase in electricity prices for customers in Band A.
The new rate is ₦225 per kilowatt-hour (kWh), which is a 240% increase from the previous rate of ₦68 per kilowatt-hour (kWh).
Organized Labor Fight against Electricity Tariff Hikes
The Nigerian Electricity Regulatory Commission (NERC) has announced a significant increase in electricity tariffs for Band A customers, who typically receive up to 20 hours of power supply daily. This group makes up about 15% of Nigeria’s over 12.82 million registered electricity consumers.
The price hike has caused concern among organized labor and manufacturers across the country. The Nigeria Labor Congress (NLC) and the Trade Union Congress (TUC) have voiced their opposition, warning of negative impacts on the economy.
They fear that the increase could lead to business closures, worsen the economic downturn, and hinder the growth of small and medium enterprises (SMEs) nationwide.
Doubts Surrounding the Whole Development
There are doubts about whether Band A customers actually receive the promised 20-hour daily power supply. NLC spokesperson Benson Upah criticized the hike, suggesting that only international financial institutions like the World Bank and the International Monetary Fund (IMF) would benefit from such actions.
The Reason for the Price Hike
NERC Vice Chairman Musiliu Oseni explained that the government could no longer afford the subsidy on electricity and needed to reduce the projected ₦2.9 trillion subsidy expenditure for 2024.
Consequently, Band A consumers affected by the tariff increase will no longer receive government subsidies for their power bills, effective April 3, 2024.
The Tariff Adjustment Would Not Affect Customers in Other Categories
NERC assured that the tariff adjustment would not affect customers in other categories, such as Bands B, C, D, and E, at least for now. However, Oseni mentioned that some Band A consumers might be downgraded to lower bands due to the failure of power distribution companies to meet the required 20-hour electricity supply.
“We have over 3,000 Discos feeders. There are over 875 Band A feeders, but upon reviewing the feeders’ performance, the commission has reduced it to under 500 feeders now, which qualify as feeders that currently meet the 20-hour average service.”
The Ministry’s Strategy to Settle Outstanding Debts Owed To Power Generation and Gas Supply Companies
In March 2024, Bayo Adelabu, Nigeria’s Minister of Power, revealed the ministry’s strategy to settle outstanding debts owed to power generation and gas supply companies. This initiative aims to alleviate financial burdens and enhance power generation levels across the country.
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