SERAP and Nigeria Electricity Consumer Advocacy Network demanded the Federal Government to order the power distribution companies to reverse the tariff hike, stressing that it came amidst the severe economic crisis in Nigeria currently.
The Socio-Economic Rights and Accountability Project (SERAP)
has urged President Muhammadu Buhari to direct the Minister of Power, Goddy
Jedy-Agba and the Chairman/CEO, Nigerian Electricity Regulatory Commission
(NERC), Prof. James Momoh to immediately reverse what it termed as the
unreasonable increase in electricity tariff, which reportedly occurred in
December 2022.
SERAP also urged the president to ensure the investigation
of the spending of public funds as ‘investments and bailouts’ by successive
governments to electricity distribution companies (DisCos) and generating
companies (GenCos) since 2005, and prosecution of cases of corruption and mismanagement.
Following the reported approval by NERC, electricity tariffs
were increased across DisCos in the country in December 2022. Several prepaid
customers had reportedly confirmed the increase. Both the Minister of Power and
NERC have refused to confirm or deny the increase.
However, in the letter dated January 7, 2023, and signed by
SERAP’s Deputy Director, Kolawole Oluwadare, the organisation said the increase
in electricity tariff would exacerbate the extreme poverty across the country
and undermine the ability of millions of Nigerians to satisfy basic human
needs. SERAP said the increase in electricity tariff failed to follow due
process.
“It is entirely inconsistent and incompatible with the
provisions of the Nigerian Constitution of 1999 (as amended), the Electric
Power Sector Reform Act and the country’s international human rights
obligations,” it stated.According to SERAP, millions of Nigerians continue to
live in darkness despite the spending by successive governments of trillions of
naira as investments and bailouts to electricity companies.
The letter, read in part: “the increase is unjustified,
especially given the unreliable, inefficient and poor quality of electricity in
the country. Rather than providing electricity discounts to poor Nigerians,
successive governments continue to give bailouts to electricity companies.
“We would be grateful if the recommended measures are taken
within seven days of the receipt and/or publication of this letter. If we have
not heard from you by then, SERAP shall consider appropriate legal actions to
compel your government to comply with our request in the public interest.
“Your government should have used the report by the National
Bureau of Statistics (NBS), which shows damning revelations that some 133 million
Nigerians are poor as a basis to improve access to regular electricity supply,
and extend electricity to remote rural households.
“The latest increase in electricity tariff is coming on the
heels of the NBC report which shows that over half of the population of Nigeria
are multi-dimensionally poor and cook with dung, wood or charcoal, rather than
cleaner energy. High deprivations are also apparent nationally in sanitation,
time to healthcare, food insecurity, and housing.”
Reacting to the development on Sunday, the Chairman, Nigeria
Electricity Consumer Advocacy Network, Tomi Akingbogun, said the tariff hike
should be reversed considering the economic hardship across the country.
He said, “It is right for us to call for a reversal and we
are demanding that it be reversed. However, this is not the first time they’ve
done it. It has been a regular thing for several years and in those instances
we’ve called for reversals.
“But the next thing you will hear is that they have modified
the law or have changed the Multi Year Tariff Order to accomodate what they are
doing. When we keep shouting they just ignore us, but I think the government
needs to really take the public seriously.
“And the public too will have to stand up for their rights,
because it will get to a point when they will push everybody to the extent that
we will all rise on the streets. We’ve been trying to make sure that the masses
are not squeezed to a point of no return.”
Akingbogun said NECAN held a lot of meetings with the power
sector operators on why it was not in the interest of the masses to raise
tariffs, but the position of consumers were ignored.
“It is really frustrating. How can someone on N30,000 minimum
wage survive this increase in tariff in the kind of economy that is prevalent
in Nigeria now? The increase has to be reversed for the benefit of the masses,”
he stated.
On his part, a legal consultant and energy law advisor,
Prof. Yemi Oke, explained that power tariff increases were meant to follow some
laid down procedures, but stressed that this was neglected in the
implementation of the recent hike.
He said, “Every increase in electricity tariff must follow a
Multi-year Tariff Order. The year 2020 was the last order which speculated a
bi-annual review to determine tariff increase.
“The MYTO- must be reviewed and specifically authorise
tariff increase after following laid-down rules including wide consultations.
All these have not been done.
“Even in my inaugural lecture, I captured this same anomaly
in the previous tariff increases. This new one shows they’re determined to
continue to take Nigerians for granted.”
Also, the President, Nigeria Consumer Protection Network,
Kunle Olubiyo, said the Federal Government had eventually withdrawn subsidy on
electricity tariffs.
He said the NERC had given the power distributors an open
cheque to effect minor tariff reviews under the reflective tariff and
service-based tariff schemes.
“It is on authority that I tell you that the Federal
Government has finally withdrawn all manner of subsidies on electricity tariff
for Band A category of consumers,” he stated.
He added, “The Federal Government in the selection of Band A
category of electricity consumers felt that those of us on Band A should be
able to afford any amount placed on tariff for electricity. This is confirmed
and instructive. There is no gain for any institution to deny this reality.
“Under the reflective tariff and service-based tariff, as a
condition precedent to increase in electricity tariff, the NERC has seemingly
given the 11 electricity distribution companies an open cheque to carry out
periodically, minor tariff adjustments.
“This is not minding the place of regular engagement and
consultation, which in the past had turned out to be a smoke screen and just to
fulfil all righteousness.”
Olubiyo stated that power consumers on Band A would have to
pay more for electricity, as the increase in Band A tariff took effect from
January 2023.
He said, “The major challenge before the regulatory
institutions, as represented by NERC, is that the commission, more than ever
before, needs to arise and wake up to its responsibility of effective
monitoring of distribution licensees/electricity market, and further demonstrate
the ability to be an incorruptible judge and impartial and fearless arbiter.”
Meanwhile, the 11 electricity distribution companies earned
about N597bn on electricity sales within the space of 12 months, according to
data obtained from the Nigerian Electricity Regulatory Commission.
The NERC data showed that revenue from energy sales by Disco
was made between January and December, 2022.
A breakdown of the report, ‘Discos’ Energy Sales by Service
Band Data for Nov 2020 to Sept 2022’, showed that N597bn was collected out of a
total of N840bn billed by the utility firms.
A total of 16 billion kWh of electricity was billed by the
11 Discos during the year under review.
Although Abuja Disco billed N109bn worth of electricity,
however, it was able to collect about N91bn.
While Benin Disco billed N89bn, the utility firm was able to
collect N51bn.
Eko Disco billed its customers N97bn, however, the firm was
able to attain N89bn collection.
Furthermore, Enugu Discos churned out a bill of N75bn, but
was able to rake in N52bn in the year.
On its part, Ibadan Discos, one of the utility firms
liquidated during the year under review, billed out N101bn, but was able to
collect about N67bn.
Ikeja Disco billed out the highest with N130bn, and recorded
the highest collection of N120bn.
Jos Electricity Distribution Company sent out bills worth
N45bn, but was able to recover about N20bn.
Kaduna Discos billed 58bn, collected N21bn; Kano billed
N53bn and raked in N34bn; Port Harcourt Disco, N64bn but recovered N41bn; while
Yola Discos, still being run by the government, sent out a bill of N18bn, but
was able to rake in N10bn, making it the least earner among the utility firms.
On his part, National President Electricity Consumers
Association of Nigeria, Chijioke James, insisted that the interest of consumers
must be considered as the government makes the second move in the privatisation
process.