A Review of the Nigerian Energy Industry

PENGASSAN faults NERC on increases in electricity tariff

Prepaid electricity metresEluonye Koyegwuaehi

06 October 2013, Sweetcrude, Lagos – PETROLEUM and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has described as unbelievable and unacceptable the increase and planned increase in electricity tariff by Nigerian Electricity Regulatory Commission, NERC, even under erratic and very poor power supply condition.

PENGASSAN called on the Federal Government to allow the Road map for power generation and distribution to fully come on stream before contemplating additional charge to consumers of the product.

The association in a statement by Comrade Mohammed Gambo, its Public Relations Officer, PRO, said “PENGASSAN watches in dismay and disbelief as the Nigerian Electricity Regulatory Commission, NERC, braces up to implement its decision on pricing regime of electricity even as Nigerians groan under an irregular supply of the commodity, nationwide. Having listened carefully to the rationale adduced for these increases in tariff by Dr. Sam Amadi, the distinguished Chairman of Nigeria’s Electricity Regulatory body that tariff must increase since the Multi Year Tariff Order, MYTO, took effect from June 2012, and it provides for periodic increment in electricity tariff per kilowatt in Section 76 of the Electricity Power Reform Act, 2005.
Though the last regulation and review of electricity pricing took place in 2012 and it is expected that this regime will remain constant till 2017, when another round of regulation is expected to take place, inflationary rate in the country has made it expedient that there should be increase in tariff.”

“The increase in tariff, in spite of shortfall in service delivery is in the best interest of Nigerians on the long run as this would encourage more investors to come into the sector and provide life more abundant as being witnessed in the Telecommunication industry. At first glance, new observers and watchers of policy somersault and abuse in the country may be tempted to fall in line with the reasoning advanced by Dr. Sam Amadi. His argument however flies when considered with the objective realities on ground. In a recent meeting with the media, the Minister of Power, Mr. Chinedu Nebo informed that the Federal Government has expended over Three Billion, Five Hundred Million Dollars ($3.5billion) yearly in the last ten (10) years for the provision of electricity for Nigerians.”

”It is also noteworthy that the same Federal Government, while issuing license to Independent Power Producers two (2) years ago charged them to generate enough electricity and supply to the national grid, while also revealing that consumers could pay higher tariffs on two fronts via the fixed cost and energy cost, i.e. cost per kilowatt hour, private or corporate. The situation on ground shows that even with the colossal amount that has been committed to power generation in the last 10 years, which stands at the highest amount in any African country, Nigeria with over 160 million people has only generated its highest output of 4, 347 (four thousand three hundred and forty seven) megawatts, a figure recorded around November, 2012, when its close door neighbor Ghana with a population of less than twenty five million people generate 14, 673 megawatts, while South Africa with a population of barely forty five (45)million people is able to generate well over forty two thousand (42,000) megawatts of electricity for its people. That is an amount more than ten times the best our country has been able to generate with the outrageous amount so far spent in developing electricity for the use of our people.”

What we are about to experience is what happened when N285b paid by Econet and MTN they could not stop them from making Nigerians pay up to N20k for sims that was supposed to be free. Same has happened as the Gencos and Discos have paid so dearly and government will be unable to stop the exploitation that has been passed to Energy Consumers. Against this background, PENGASSAN lends its voice to the call for the government to allow the Road map for power generation and distribution to fully come on stream before contemplating additional charge to consumers of the product.”

PENGASSAN added that the association was “equally of the opinion that corruption has been at the root of Government’s inability to generate enough electricity for its people, likewise many other areas of failure in government. We therefore charge the government to be more committed in its fight against this canker worm and to do everything possible to give Nigerians a new lease of life and hope in the survival of this nation and its most disadvantaged population.”

In this article

Join the Conversation