Organised labour on Thursday rejected the planned electricity tariffs hike proposed to take effect from July 1, describing it treckless, callous and insensitive.
The apex electricity sector regulatory authority, the Nigerian Electricity Regulatory Commission (NERC), has already indicated that its schedule for a minor tariffs review would take effect in line with its Multi-Year Tariff Order (MYTO).
Under the MYTO, NERC mandates the electricity distribution companies (DISCos) to carry out a minor tariff review undertaken twice every year, while the major review is usually done every five years.
But, the first minor review for the year is coinciding with the period when Nigerian consumers are already under enormous pressure as a result of the recent 195 percent hike in the pump price of petrol following last month’s removal of subsidy on Premium Motor Spirit (PMS), popularly called petrol.
Petrol pump price has already climbed from the previous N197 per litre to an average of N488 and N557 across the country.
The high price of petrol has resulted in a spike in the cost of all goods and services that depend on petrol, while the rate of inflation has jumped from 22.2 percent prior to the removal of subsidy on petrol to the latest level of 22.4 percent.
Beyond petrol, the floating of the Naira by the Central Bank of Nigeria (CBN), which abolished the dual rate in the foreign exchange market, has raised the inflationary trend in the economy, with the Naira performing dismally against the dollar and other international currencies.
On Thursday, the Naira, which has continued to be declining every day in value, took another plunge, exchanging for N815 to the dollar from N765 in the Import & Export (I&E) Window the previous day.
Energy industry experts said an additional 40 percent increase in electricity tariff under the coming MYTO review calendar could pose a serious threat to the continued survival of the average Nigerians, particularly low income workers whose take home pay can hardly take them home.
Reacting to the proposed electricity tariffs hike, the Nigeria Labour Congress (NLC) criticised the government, describing it as “both insensitive and callous and reflects an organised indifference to the well-being of consumers, especially, the poor ones.”
The NLC President, Joe Ajaero, said in a statement in Abuja that the proposed massive increase was reckless against the background of the explanation by the government as a response to the over 100 percent increase in the pump price of PMS.
Ajaero said available details revealed that a movement in inflation from 16.9 percent to 22.41 percent and a shift in exchange rate from N441 to N750.
“We believe not even these figures are a justification for this reckless proposed tariff increase,” the Labour leader said.
He based the Labour opposition to the tariff hike proposal on the capacity of the average electricity consumer to pay and the quality of service delivery, saying these are not only germane, but superior to any rationalisation by market logic.
Ajaero argued that the proposed tariff hike does not sound logical considering that the service providers, in spite of sundry support from the government, have not been able to meet the threshold of 5,000 megawatts (MW) generation capacity.
Apart from the issue of inadequate generation capacity, the NLC said there operators have often been accused of surreptitious increases without notice to their customers in violation of established statutes.
“The inherent risk in the new regime of tariff is that there is no control (by the regulatory authorities), implying that by August (when the second minor review of MYTO will hold), consumers will pay new rates.
“The other risk is that by the time other products or service-rendering entities come up with their new prices or rates, the ordinary person would have been compacted into dust,” he said.
On the way forward, the NLC urged the government and other proponents market fundamentals as determinants of prices, to reassess their perspectives on the issue.
“These apostles of the market who have called NLC all sorts of names should check their conscience.
“The rate at which they are going is highly combative and combustible. With contemplation of payment of school fees in tertiary institutions and increases in privately-owned ones in addition to other costs/tariffs on the way, life in Nigeria could truly be Hobbesian.
“The market economies, which the Market Fundamentalists seek to emulate, have in place socio-economic safeguards which we do not have.
“In light of this, our advice is that this proposed tariff hike should be shelved for our collective safety”, Ajaero said.
