NIGERIANS TO PAY MORE FOR ELECTRICITY BY JULY

Electricity consumers, especially low-income earners in Nigeria, will by July begin to pay more for electricity, investigation by New Telegraph has revealed. The N100 billion stabilisation fund, which the Federal Government disbursed on June 1, 2012, will finish by end of June this year. The fund was disbursed in batches of N50 billion in 2012 and N50 billion in 2013 to subsidise the tariff for low-income consumers who are mainly rural dwellers and the poor in semi-urban centres.
Further checks by New Telegraph showed that government did not include an extension of this stabilisation funds in the 2014 budget. Spokesperson for Nigerian Electricity Regulating Commission (NERC), Dr. Usman Abba-Arabi, did not pick calls put across to him, but a source at the commission told New Telegraph that the commission might not be able to stop distribution companies from going ahead to collect full tariff on electricity by July, when the stabilization funds must have been exhausted.
“There is no budgetary provision for the stabilisation funds in the 2014 Budget and you know the implication of this on the electricity tariff by July,” he said, adding, “The implication is that the government has tactically left consumers to their fate.” NERC’s Commissioner in charge of Government and Consumer Affairs, Dr. Abba Ibrahim, had earlier said that the commission was undertaking the third review of Multi-Year Tariff Order (MYTO) 2 based on demands for tariff hike by power investors. Ibrahim, who revealed this in an interview with New Telegraph in February, maintained that this review was subject to the outcome of the ongoing collation of statistics based on the complaints by the new investors.
The new investors, who plan an injection of about $1.8 billion, had called for a hike in electricity tariff, which they considered as non-visible to the global reality of electricity generation, transmission and distribution. But Ibrahim disclosed that the review might be a reduction or an increase in tariff, “depending on the outcome of the ongoing findings and an examination of interest rates, exchange rates, inflation rates and available generation capacity during the preceding six months.”
“The MYTO,” Ibrahim said, “Involves an examination of interest rates, exchange rates, inflation rates and available generation capacity during the preceding six months and if these report a change of plus or minus five per cent individually, such change will be applied to the tariff published for each distribution company.
“The two reviews earlier done did not result in any increase of tariff because the indices and fundamentals of the MYTO have not significantly changed. “The changes that some customers have belatedly noticed in their bills were announced by the commission on June 1, 2012.”
Meanwhile, consumers grouped as R3 and R4 who, according to MYTO2 paid N23.71/ kwh with fixed meter charges of N21,256.30 and N118,830.56 respectively are to, based on demands by investors, pay N25/ kwh, New Telegraph gathered.
The N100 billion stabilisation fund disbursed in 2012 by the Federal Government, which only accommodated the cost to be borne by consumers rated below the N24/Kwh cost of production at the rate of N50 billion for 2012 and 2013 respectively, will end by June 30. Middle income consumers who paid between N11 and N12/ Kwh would now pay N13.5/kwh.
Source: News Telegraph