Lagos — The federal government has set aside advice from the Nigerian Electricity Regulatory Commission, NERC, and has agreed to subsidise electricity tariff for the next three months.
The decision was reached after a meeting with the ad-hoc technical committee on electricity tariff with the federal government and representatives of the Nigeria Labour Congress, NLC, and the Trade Union Congress, TUC on Monday where the parties reached an agreement to use proceeds from Value Added Tax, VAT to temporarily subsidise electricity tariff for consumers.
NERC’s Vice President, Sanusi Garba had last week called for an end to electricity subsidy, however, federal government meeting with the unions which began on Sunday, and was presided by the Minister of State for Labour and Employment, Festus Keyamo, resolved to include the provision of a tariff relief package of about N10.20 per kilowatt-hour for certain categories of electricity consumers for the next three months.
The agreement also included free distribution of about six million prepaid metres to consumers at the end of the two weeks grace period for the suspension of the new tariffs announced last September.
Other highlights of the resolutions include using VAT proceeds to temporarily subsidise electricity tariff pending when the government committee completes its work on tariff negotiation and other issues capable of substantially affecting tariff adjustments in the country.
The meeting also agreed to provide salary protection for electricity workers, mandatory refund for any over-billing during the system transition period by the DisCos, and monthly publication by the Nigerian Electricity Regulatory Commission (NERC) of allowed billing of unmetered customers in the country.
The resolutions are contained in a communique released by Mr. Keyamo on Monday through his verified Twitter handle, @fkeyamo.
The NLC and the TUC had last month threatened to proceed on strike if the government did not reverse the electricity tariff hike and increase in petrol price.
The prices were increased after the government removed subsidy on the two items.
After meetings between all parties, the government asked the DisCos to reverse the electricity tariff increase by two weeks to allow for negotiations. An extra week was then added to the two weeks before Monday’s resolution.
A document obtained by SweetcrudeReports last week had revealed how the federal government subsidises about 80 percent of distributed power despite almost seven years of privatisation.
According to the document by the Association of Power Generation Companies, APGC, noted that government subsidises between 75-80 percent of distributed power.