Tension Mounts As Labour Firmly Opposes Government’s Push For Electricity Tariff Hike

Tension Mounts As Labour Firmly Opposes Government’s Push For Electricity Tariff Hike....KINDLY READ THE FULL STORY HERE▶

The Federal Government has reiterated its stance on the 240 per cent increase in electricity tariff for consumers in the ‘A’ category despite widespread calls for its reversal. Revealing that the subsidized pricing system would be temporary, with plans for a transition towards fully reflective tariffs within three years, the government’s decision has faced criticism from the Nigeria Labour Congress (NLC). Labeling the tariff hike as unjust and unpopular, the NLC warned the government to brace for the repercussions of its actions, emphasizing its alignment with the World Bank and International Monetary Fund.

Benson Upah, Head of Information at NLC, expressed dissatisfaction, stating, “We have consistently opposed this insensitive and unpopular tariff hike. If the government chooses to persist with such a policy, it must be prepared to face its consequences.” Criticism extended to the impact on manufacturing and business operations, with concerns raised over the potential adverse effects on the economy.

Manufacturers and organized labor joined forces against the tariff hike, which affects approximately 1.9 million consumers, predominantly in the ‘A’ category. This group constitutes about 15 per cent of the nation’s 12.82 million power consumers. Despite the outcry, the government pressed ahead with its decision, announcing the tariff hike effective April 3, 2024.

In response to opposition, Minister of Power Adebayo Adelabu defended the move, citing the unsustainable nature of power subsidies. Adelabu emphasized the burden placed on government finances, with subsidies projected to cost approximately N2.9 trillion in 2024 alone. He underscored the need to prioritize other sectors competing for funding, arguing for a gradual transition towards cost-reflective tariffs.

The minister outlined plans to phase out subsidies over three years, with the withdrawal of subsidies for ‘A’ category customers serving as an initial step. Adelabu positioned the tariff adjustment as beneficial to low-income consumers, asserting that the majority of those affected could afford the increased rates.

However, within days of the tariff hike, the Abuja Electricity Distribution Company Plc (AEDC) implemented the new rates across all consumer bands under its jurisdiction, contrary to directives. This prompted the Nigerian Electricity Regulatory Commission (NERC) to impose a N200 million fine on the company for violating regulations.

As stakeholders continue to grapple with the implications of the tariff hike, the debate surrounding electricity pricing in Nigeria underscores broader challenges in balancing affordability with the need for sustainable energy infrastructure.

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