The Nigeria Employers’ Consultative Association (NECA) said the proposed hike in electricity tariff is necessary to get the power sector back on track.
Its Director-General, Mr Timothy Olawale, said putting the tariff concerns in context, the issue of the increment was intended to enable the sector to realise the right price for the
Olawale, who spoke in Lagos on Monday, stated that cost reflective tariff was important to ensure that provider of the commodity or service could cover operational and capital expenses in order to stay in business and deliver on service.
“The issue of tariff has remained topical in the sector since shortly after privatization. The Nigerian Electricity Regulatory Commission (NERC) has said that the electricity tariffs being paid by consumers will increase in April this year.
“NERC disclosed this in its ‘December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020, which was dated December 31, 2019.
“Though, the proposed increase in tariff might cause a shock from the consumers’ perspective, it is, however, a necessity in order to get the power sector back on track.
“While customers have said the tariff review should only take place after there has been improvement in service, service providers have said for service to improve, the right amount has to be paid.
“The argument has always been a cyclical one, but putting the matter in context, therefore, the issue of the increase is intended to enable the sector to realise what can be described as right price for the product.
“It is with this right that more investment can be attracted and consequently, improved service,” he said.
On the challenges of regular power supply and imperative for appropriate pricing of electricity, the NECA director-general said tariff reviews were expected.
While urging the Discos to justify the proposed tariff hike, Olawale said consumers and businesses were not opposed to paying appropriate price for electricity consumed.
According to him, the major contention has been estimated and sometimes outrageous billing for power not consumed, with implication on cost of living and cost of doing business without a guarantee of commensurate improvement in quality of service. (NAN)
