Reps Demand Reversal of Electricity Tariff Hike, Call for Investigation

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In April, the Nigerian government announced an increase in electricity tariffs affecting customers in the Band A category, who make up 17% of consumers and account for 40% of electricity consumption. This policy allowed Electricity Distribution Companies (DISCOs) to raise prices from ₦68 to ₦225 ($0.15) per kilowatt-hour, with the expectation of guaranteeing 20 hours of electricity supply per day.


The government justified this decision as a measure to improve liquidity in the downstream power sector, citing the difficulty in sustaining subsidies amidst significant debt. Minister of Power, Bayo Adelabu, highlighted that the sector was burdened with over ₦3 trillion in inherited debt, including ₦2 trillion owed to gas companies and ₦1.3 trillion to Generation Companies (GenCos).


The tariff increase faced widespread condemnation from customers and labor groups, particularly the Nigerian Labour Congress (NLC), which demanded its reversal. Despite these protests, the government proceeded with the hike and expanded the number of customers classified under the Band A category.


On April 30, the House of Representatives urged the Nigerian Electricity Regulatory Commission (NERC) to suspend the tariff hike pending an investigation, but the implementation continued.


In response to the ongoing controversy, the House of Representatives has called on NERC and DISCOs to revert to the old electricity tariff. This resolution came from an ad hoc committee report investigating the recent tariff hike for Band A customers. Victor Nwokolo, Chairman of the joint committee, presented the report, which included three key recommendations:


1. Revert to Previous Tariff: The committee recommended reverting to the previous tariff and implementing any necessary hikes in phases to mitigate the impact on consumers.

   

2. Independent Investigation: The committee suggested hiring independent contractors to conduct a forensic investigation to determine the actual cost of electricity tariffs.


3. Compliance with Electricity Act: NERC was urged to comply with section 116 (2b and 3b) of the Electricity Act within 60 days.


The Committee of the Whole adopted these recommendations, emphasizing the need for a gradual approach to tariff increases and a thorough investigation to ensure fair pricing for consumers.

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