Stakeholders in manufacturing sector in Northern Nigerian biggest industrial hub, Kano, have decried the new proposed electricity tariff announced by the Nigerian Electricity Regulatory Commission (NERC), which takes effect soon.
According to the stakeholders, the upward review of electricity tariff by NREC, at this pointing in time when manufacturing sector is yet to be fully activated in the country, has the potential of fuelling the cost of doing business.
Fact gathered from the uploaded document on NREC website seen by BusinessDay shows that the tariff review is a follow up to the Multi Year Tariff Order (MYTO) of 2015, which came into effect on February 1, 2016, and is to be reviewed every six month, but has never been review, until now.
Under the new review, tariff payable by electricity consumers across the country, in the 11 Power Distribution Companies (Discos), has been hiked with effect from last month (July).
An insight into the new tariff indicates that an average electricity consumer in Kano, which used to pay N25/kwh previously, will now pay N30, which is the cost reflective tariff for the MYTO in 2018.
NREC had also computed a total sum of N97.8 billion tariff as shortfall for the Kano Electricity Distribution Company (KEDCO) for 2015 to 2018, while another N42 billion was recognised to take care of shortfall for only 2019.
Stakeholders within the manufacturing community in Kano have denounced the new tariff increase, describing it as unjustifiable in the face of the gross electricity shortages operators of industries are being confronted with in the state.
One of the manufacturers, who do not want his name printed, states the new tariff will further crippled ongoing efforts to resuscitate industrial activities in the state, which is at the moment on a downward trend.
“The announcement made by NREC in respect of the implementation of an upward review of electricity tariff, at this material time when most of the industrialists are struggling to remain in operation, is a worrisome development for stakeholders in the sector.
“What particularly made the hike unjustifiable was the fact that stakeholders in the manufacturing sector in the state, were never consulted before the implementation of the new tariff was pronounced.
“More so, if you look at the fact that when NREC even fixed tariff at #25/kwh, KEDCO has been charging industrial consumers in the state #41.45 kobo, as against the approved tariff ” he said.
BusinessDay observes in a document on NREC’s website, number NERC/GL/170 signed on August 19, 2019, by the chairman of NREC, James Momoh, and the commissioner, Legal Licensing and Compliance, Dafe Akpeneye, notes the tariff comes into effect on July 1, 2019.
Effort made to get the view of the management of KEDCO on the new tariff was not successful as calls made to the telephone of the head of corporate communications of the company, Dan-Muhammadu Ismailia, was not picked.
