Electricity: DisCos agree to suspend tariff increase

Electricity distribution companies in Nigeria (DisCos) have agreed to suspend the planned increase in electricity tariff after a meeting with the National Assembly leadership, an official has said.

The DisCos reportedly agreed to suspend the increase till the first quarter of next year while the leadership of the National Assembly has promised to meet with President Muhammadu Buhari on the issue.

The DisCos, however, said if the planned hike is eventually deferred till next year, the government should continue to bear the difference in the present tariff and what was considered as the appropriate tariff.

Details of the meeting were made known in a statement by Ola Awoniyi, the media aide to Senate President Ahmad Lawan.

According to the statement, Mr Lawan; Speaker of the House of Representatives, Femi Gbajabiamila and other principal officers of the two chambers met at the National Assembly with the chief executives of the government's electricity regulatory body and those of the DisCos across the country and succeeded in convincing the DisCos to defer the planned hike.

Also in attendance were the chairmen of the committees on power from the Senate and House of Representatives.

The lawmakers noted that the timing of the planned hike was wrong even though they had not much issue with the need to introduce a cost reflective tariff for the power sector to attract the much needed investment.

To this regard, the DisCos reportedly admitted that they were not well prepared for the planned hike in tariffs even though they so much desired the increase.

"The agreement here is that there is not going to be any increase in the tariffs on July 1st. The Speaker and I, we are going to take appropriate action and meet with the president.

"We are in agreement here that there is no question on the justification of the increase but the time is simply not right and appropriate measures need to be put in place. So between now and the first quarter of next year, our task will be to work together with you to ensure that we put those blocks in place to support the eventual increase in tariffs," Mr Lawan was quoted as saying.

While he noted that the planned increase in the tariff was of concern to the lawmakers, he said the government has been doing a lot as part of its obligations to provide some form of intervention.

"I'm quite aware that for this year, probably starting from last year, over N600 billion was earmarked for this sector to improve. There is too much stress in the lives of Nigerians today and indeed across the world because of the challenges imposed by COVID-19 pandemic and even before then, we had issues that would always make it tough for our people to effectively pay the tariffs.

"One way or the other, for this business to flourish, for this sector to be appropriately fixed, for it to attract investment, something has to give way, there is no doubt about that but it is also crucial that we look at the timing for any of our actions," he said.

In the same vein, Mr Gbajabiamila said the National Assembly is on the same page with the DisCos on the issue of cost reflective tariffs.

"A well intended programme or policy of government can fall flat on the face and never recover if you do it at a wrong time. I think we all agree to that.

"There cannot be a time as bad as this for us to increase anything. Forget about electricity, anything. Whereas, even in time of decreasing revenue, we are even reducing the pump price. I don't know how we can justify an increase in the cost of electricity at this time in Nigeria.

"Whatever will affect his (Buhari) government is something that should concern all of us. I think this will affect his government. This timing. Not the increase. The timing. I think it will affect his government and if it is going to affect his government, we should all rally around our people, our president and the government to make sure we do the right thing," he said.

In attendance at the meeting were the representatives of NERC, Kano Electricity Distribution Company, Ikeja Electricity Distribution Company, Kaduna Electricity Distribution Company and Eko Electricity Distribution Company.

The Nigerian Electricity Regulatory Commission (NERC) had in January, announced that there would be an increase in electricity tariff across the country from April 1. The planned hike was later postponed in compliance with President Muhammadu Buhari's decision to grant moratorium for certain federal government-funded facilities throughout the period of the global economic crisis as a result of the current Coronavirus pandemic.

A review of the new tariffs by PREMIUM TIMES showed price increases would have ranged from 60 per cent in places like Ikeja, to about 73 per cent in Abuja, and about 78 per cent in Enugu.

Many Nigerians have condemned the tariff increase, saying the electricity situation should get better first before an increase. Proponents, however, say the electricity situation cannot get better unless consumers pay appropriate prices for electricity and allow investors to make enough money to reinvest in their infrastructure.

This article was originally published by The Premium Times. Photo: EnergyMixReport.