National Union of Electricity Employees (NUEE) has said the hike in electricity tariff is further exploitation of the masses who are already heavily burdened by the economic situation of the country.
NUEE said the sensibility of the increase is begging for explanation, as there has not been any meaningful improvement since the privatisation of the power sector, reports Nigerian Tribune.
The union further said Nigeria has an installed capacity of about 14,000MW but generates about 4,803MW and in need of at least 30,000MW to reach sufficiency.
In a statement by its acting General Secretary, Dominic Igwebike, NUEE said: “The recent hike in electricity tariff from N68/kwh to N225/kwh is absurd in a country where the majority of the masses are grappling with basic survival and an electricity access rate of about 55 percent. The hike in the electricity tariff is grossly detrimental to the economic diversification, growth and well-being of Nigerians.
“The justification given by Nigeria Electricity Regulatory Commission (NERC) is that the hike is attributed to only Band A consumers, who make up only 15 percent of electricity consumers and utilise 40 percent of the nation’s electricity consumption. It begs to understand the person(s) that uttered such a statement purporting that it would not affect the general public.
“They need to answer these questions: who are the Band A consumers? What do they do? Who are the customers of the Band A consumers? Who bears the brunt of the electricity hike?”
“The general public is the one that will be most affected by this. They are the customers and end-users of the Band A products and services. The additional costs will be transferred to the common man, so they are indirectly being exploited, notwithstanding their dwindling purchasing power and increasing impoverishment.”
On the spill-over effect of the hike on the manufacturing sector, the union said: “The increased cost of goods will make Nigerian-produced goods unattractive as imported and smuggled items will be far cheaper than it. People will resort to those goods, thereby fuelling the economy and employment situation of the countries of import. Our manufacturing and business sectors will become comatose.
“This is why the US, UK, France, Germany and all developed economies support their factories with billions invested in power subsidies. Why is Nigeria different? Electricity in Egypt is an average of N21.68 per kwh and in South Africa it is N226 per kwh. The minimum wage in Egypt is N78,360 while in South Africa it is N328,395. The minimum wage in Nigeria is N30,000 while the new electricity tariff is N255 per kwh.”
“A country that genuinely has the interest of its people at heart and wants to grow will ensure that the real sector is given the most support it can get, not putting a nail in its coffin.”
The union further said: “Let’s look at these two scenarios: 1. Company A uses 1,000kwh of energy in manufacturing and works for 24 hours a day, With the current hike, his daily energy cost will increase from N50,592,000 to N167,400,000, which is an additional direct cost of N116,808,000, that is, 231 percent, not to mention the increase in the cost of their inputs as the costs of those will also be increased by the producers to accommodate their own increase. The price of Company A in Band A products will go up by about 300 percent and those in Band Z where there is no transformer will buy at the increased price. If they buy at a higher price, they are the ones paying the almost 300 percent increase not the manufacturer purported to be taxed.”
“Company B, increased the price of their products in line with their new economic reality. Consumers don’t have the purchasing power to buy at the new rate, Company B will close down. As Company B closes down, some of its peers facing the same economic challenge will follow suit and then unemployment will increase. If that happens, insecurity will be on an upward trend, then the government will spend more than the money made in fighting insecurity which we haven’t been able to get hold of.
“The Minister of Power and NERC did not consult with the stakeholders in the sector before the increase. The Minister of Power has relegated himself as the spokesperson for the DisCos where he is justifying cost-reflective tariffs. What of service-reflective tariffs as it relates to consumers? We as a stakeholder don’t know the energy policy of this present administration.
“As a critical stakeholder in the power sector who is concerned with Nigerians getting constant and affordable power supply, we state categorically that the hike in the electricity tariff is not beneficial to Nigerians and should be withdrawn.”
