Manufacturers and organized labor are voicing their opposition to the Federal Government’s significant 240% tariff increase on electricity, particularly for users enjoying a 20-hour power supply.
They are adamant about the necessity of maintaining electricity subsidies, cautioning that the removal of such support could drive manufacturers out of business and exacerbate inflationary pressures.
The removal of subsidies specifically impacts consumers in the Band A category, comprising approximately 15% of the nation’s total electricity users.
This move, announced during a press briefing by the Nigerian Electricity Regulatory Commission (NERC) in Abuja, saw the tariff spike from N68/kWh to N225/kWh, marking a staggering 240% surge.
Effective immediately, this decision sparked immediate backlash from various sectors, including the organized private sector, the Nigeria Labour Congress, and the Trade Union Congress.
Critics argue that the tariff hike not only poses a threat to manufacturers but also exacerbates inflation and stifles the growth of small and medium enterprises.
Moreover, they assert that the reality of uninterrupted 20-hour daily power supply is non-existent in Nigeria, further questioning the justification for such an increase.
Band A consumers, who previously paid N68/kWh, are now grappling with the sudden surge in tariffs imposed by the government through NERC.
Musiliu Oseni, Vice Chairman of NERC, defended the government’s stance, citing the unsustainable nature of electricity subsidies and the need to curtail the projected N2.9 trillion expenditure on subsidies this year.
Oseni clarified that while Band A customers make up a significant portion of the nation’s electricity consumers, the commission has also initiated measures to downgrade certain customers within this category.
