The Nigerian Electricity Regulatory Commission (NERC), has approved a 50% tariff hike in the price of electricity tariff with effect from January 1, 2021. According to the new rule, the hike is to be shouldered by consumers of the electricity from the 11 electricity Distribution Companies, DISCOs.
The price hike is coming shortly after the Nigerian masses kicked against the move when it was first unveiled last November 2020 and was suspended for lack of awareness by the consumers.
In a revised Multi-Year Tariff Order (MYTO) signed by the new Chairman of NERC, Engr. Sanusi Garba, on December 30, 2020, the new tariff increase took effect on January 1, 2021, and supersedes the previous Order NERC/2028/2020.
Similarly, in the new order NERC/225/2020, the commission said it considered the 14.9% inflation rate rise in November 2020, foreign exchange of N379.4/$1 as of December 29, 2020, available generation capacity, US inflation rate of 1.22% and the Capital Expenditure (CAPEX) of the power firms to raise the tariff.
Accordingly, the Revised Service-Based Tariff (SBT) also saw an increase in the rates payable by all classes of electricity consumers different from the one of last November that exempted the low power category.
The NERC Order revealed that this would be effective till 2021 when a cost Reflective Tariff (CRT) expected to be reviewed higher would come to effect from June to December 2021.
It could be recalled that NERC sometime in December 2020, notified the public that it had begun a review for another tariff, which has been completed and which was just implemented, this January 1, 2021.
The Regulatory agency had raised tariff for DISCOs in September which was greeted with outcry by consumers of electricity and the Organised Labour, making the Federal government make a U-turn on the law for parties to negotiate.
The dialogue leads to the suspension of the tariff while in some cases were subsidized through discount with effect November 1, 2020, to customers who were getting up to 12 hrs power supply.