Discos demand 200% increase in electricity tariff

The current tariff to residential electricity consumers across the country may go up by 200 per cent very soon, reports Punch. This is because electricity distribution companies (DISCOs) have presented a proposal to the Nigerian Electricity Regulatory Commission (NERC) about the need for them to raise tariffs to consumers as soon as possible.

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Punch quoted the Chief Executive Officer (CEO) of Association of Nigerian Electricity Distributors, an umbrella body for the Discos, Azu Obiaya as confirming the move for tariff increase. Obiaya said the proposal for tariff increase is important in order to remain in business and provide good service to Nigerians. In the proposal, the Discos are seeking to increase current average energy charge of N22.8 per kilowatt-hour to either N70 or as high as N105. “To review the tariff, we will be looking at an average rate of N70 per kilowatt-hour for residential consumers. But some Discos will like to have the rate as high as N105/kWh,” he said.

Obiaya added: “Discos are experiencing revenue shortfall on a monthly basis of N38bn. As of June 2016, the MDAs owed the Discos N53bn post-privatisation. “The books of the Discos are so bad that they have no chance anymore to access finance. These books do not reflect the cash flow that is necessary for them to be taken seriously by any lender.”

But Punch quotes an unnamed official of NERC as saying that NERC is hesitant about considering the proposal of the Discos despite economic recession. “The minor review of tariff is ongoing at present but NERC has yet to consider their plea for such increase in tariff, although the economic fundamentals in Nigeria have seriously changed and are now so high,” the official said. Meanwhile, Nigeria’s renowned economist and financial expert, Professor Pat Utomi, has attributed the present economic recession to the “bad behaviour” of previous governments. The renowned political economist noted that Nigerian leaders are lazy and many are in the position of authority but are not leaders. He stated that every government appears to be worse than the one before it and that there is the dearth of leadership values among political elites.