• Monday, April 22, 2024
businessday logo


Manufacturers, labour fume over 240% electricity tariff hike for Band A customers

In a move sparking immediate backlash, the Nigerian government, through the Nigerian Electricity Regulatory Commission (NERC), announced a significant increase in electricity tariffs for Band A customers. This category, representing roughly 15% of the nation’s power users and promised up to 20 hours of daily supply, will now pay N225 per kilowatt-hour (kWh), a staggering 240% jump from the previous N68/kWh rate.

The hike has ignited strong opposition from both manufacturers and organized labour. The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) voiced their collective disapproval, emphasizing the potential consequences for the economy. They argue the increased cost will cripple manufacturers, exacerbate inflation, and stifle the growth of small and medium enterprises (SMEs). Additionally, they raise concerns about the actual availability of the promised 20-hour daily power supply, questioning its existence anywhere in Nigeria.

Subsidy removal fuels tensions

The government justifies the tariff hike by citing the unsustainable nature of electricity subsidies. NERC Vice Chairman Musiliu Oseni explained the need to curb the projected N2.9 trillion expenditure on power subsidies for 2024. However, the complete removal of subsidies for Band A customers has drawn criticism. Manufacturers and labour unions warn it will drive businesses out of operation, further burdening consumers with rising electricity costs.

Downgrades add to consumer frustration

Adding fuel to the fire, NERC has reportedly downgraded some customers previously classified under Band A. This means even those who may not have consistently received 20 hours of power will now face the higher tariff.

The announcement has cast a shadow over the government’s efforts to improve the nation’s power sector. With growing discontent from key stakeholders, the coming days may see further developments regarding the controversial tariff increase.