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Power: NERC applies “brakes” on hike in tariffs

The NERC has suspended the payment of the new electricity tariffs earlier scheduled to take off today, April 1, for at least three months.

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The Nigerian Electricity Regulatory Commission (NERC), National electricity grid collapses again, as NUEE suspends strike action , FG to increase electricity tariffs in order to improve power supply, Power: Liquidity crisis-same old story in 2020?, GenCos urges NBET to pay up N1 trillion debt, Electricity Tariff: FG, electricity stakeholders to work on equitable rate , Power: NERC applies "brakes" on hike in tariffs, NERC to sanction 7 DisCos over uncapped estimated billing

The Nigerian Electricity Regulatory Commission (NERC) has suspended the payment of the new electricity tariffs earlier scheduled to take off today, April 1, for at least three months because of the impact of the coronavirus pandemic which has led to a shutdown of most economic activities in the country.

The Nigerian Electricity Regulatory Commission (NERC) had earlier issued the “December 2019 Minor Review of MYTO 2015 and Minimum Remittance Order for the Year 2020” to all DisCos which was expected to take effect from 1 April 2020.

The commission and other industry players are, however, concerned that a review of tariffs at a time like this would worsen the situation of the average Nigerian, majority of whom are daily wage earners who cannot earn any income, particularly with the lockdown in FCT, Lagos and Ogun states.

According to NERC, the delay will give them a chance to negotiate and get commitments from the DisCos for service level improvements which must be commensurate with the extent of the planned tariff increase. The issue of a hike in electricity tariff has been a contentious issue for some years now.

[READ MORE: Dangote Cement Plc: Frail macro conditions to pressure earnings in 2020)

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In 2015, NERC tried to implement cost-reflective tariffs proposing a 45% hike, following which labour unions took it to court. Consequently, tariff hike plans have been on hold since then. The argument by those against a hike was that, given persistent inflationary pressures on households and shrinking consumer wallets, it would have been unreasonable to introduce tariff hikes.

On the other side of the divide, many also argue that they will like to see an improvement in power supply to households before they can agree to further tariff hikes.

Power: NERC applies "brakes" on hike in tariffs

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While we agree totally with the suspension of any tariff hike considering current conditions, we remain staunch proponents of cost-reflective tariffs, as we believe low tariffs have a ripple effect on the entire value chain and in turn the development of the power sector. Accordingly, we believe the implementation of tariffs that reflect market conditions will be a major boost towards improving electricity supply in the country.

Although revised tariffs are scheduled to take effect from July, we understand that the revised tariffs are still not cost-reflective and require the government to pay the shortfall to the DisCos.

_______________________________________________________________________

CSL STOCKBROKERS LIMITED CSL Stockbrokers,

Member of the Nigerian Stock Exchange,

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First City Plaza, 44 Marina,

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PO Box 9117,

Lagos State.

1 Comment

1 Comment

  1. Anonymous

    April 3, 2020 at 8:01 pm

    Really, I do believe they have implemented the increase on the Prepaid meters. I thought it was because of the lockdown until I checked night time (12 midnight to 6a.m) usage which has doubled since Apr 1st.

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Business News

Nascon Allied Industries Plc: Increase in sale of goods boosts revenues

Nascon Allied Industries Plc recorded a boost from an increase in the sale of goods revenue-generating unit

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Nascon Allied Industries Plc recorded a boost from an increase in the sale of goods revenue-generating units, as total revenues increased slightly. The company reported revenues of N21.87 billion in 2020 (9months) – 4.01% increase compared to N21.03 billion in the corresponding period of 2019.

What you should know

Key highlights from 2020 (9months) results

  • Revenues increased by 4.01% from N21.03 billion to N21.87 billion YoY.
  • Revenues from sale of edible, refined, bulk grade salt; seasoning and vegetable oil, increased to N21.87 billion, +22.53% YoY.
  • Other income increased to N12.81 million, +27.43% YoY.
  • No revenue was recorded for freight income on the deliveries of salt and seasoning income-generating unit.
  • Gross profit increased to N8.96 billion, +74.56% YoY.
  • Operating profit increased to N3.64 billion +18.60% YoY.
  • Pre-tax profits increased to N3.47 billion, +16.63% YoY.
  • Post-tax profits increased to N2.29 billion, +13.27% YoY.
  • Earnings Per Share increased to 115 kobo, +12.75% YoY
  • Total assets increased to N44.36 billion, +45.79% YoY.
  • Total liabilities increased to N32.04 billion, +67.21% YoY.
  • Total equity increased to N12.32 billion, +9.35% YoY.

(READ MORE:Dangote’s NASCON Allied Industries Plc moves operation from Apapa)

Bottomline

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Nascon Allied Industries Plc recorded a boost from increase in sale of goods revenue-generating unit, but no revenue was recorded for its freight income on the deliveries of salt and seasoning revenue generating-unit.

Though companies have generally recorded decreased revenues in the last three quarters, mostly due to COVID-19; Nascon Allied Industries Plc was able to increase its total revenues and pre-tax profits in the period under consideration.

 

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Tech News

Instagram disables its “Recent” feature

Instagram has announced it remove the “recent” tab from hashtag pages on a temporary basis.

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COVID-19: Instagram cracks down on coronavirus AR effects, Instagram Tenders apology for fagging #EndSARS fake, Instagram has disabled the “Recent” feature for the forthcoming U.S election,

Instagram disclosed that it would remove the “Recent” tab from its hashtag pages for people in the United States of America.

The social networking and video sharing service stated this on its official Twitter handle. It said it is “doing this to reduce the real-time spread of potentially harmful content that could pop up around the election.”

What you should know

Nairametrics had reported on Instagram’s apology for its algorithm malfunction that led to the flagging of #EndSARS posts as fake.

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Instagram has also taken the following measures to ensure a successful November election.

  • The registration of 4.4 million votes this year through its flagship platform – Instagram and Messenger.
  • Serving as a means of information and tool to people in the US on the electoral process
  • The ban of any content that can thwart the success of the election.

(READ MORE:U.S dollar stable amid U.S holiday)

Mark Zuckerberg, the CEO of Facebook, said he was perturbed about the high risks for civil unrest in the US due to the upcoming presidential election.

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“I’m worried that with our nation so divided and election results potentially taking days or weeks to be finalized, there is a risk of civil unrest across the country.”

Furthermore, he disclosed on a call while discussing Facebook’s Q3 earnings, that “given this, companies like ours need to go well beyond what we’ve done before.”

Why this matters

The aim of the short-term decision is to decrease the spread of misinformation in the forthcoming US election.

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ENDSARS

#EndSARS: Police did not shoot protesters – IGP Adamu

The IGP has said that police officers acted professionally and exercised commendable restraints during the #EndSARS protests.

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The Inspector-General of Police, M.A Adamu, has said that officers of the Nigeria Police Force acted professionally and exercised commendable restraints during the protests, in a response to Amnesty International about police firing at protesters.

The IG disclosed this in a statement on Friday morning, saying reports on the shooting of protesters is not true.

What you should know

Amnesty International released a report on the 21st of October, 2020, saying it has confirmed “that the Nigerian army and police killed at least 12 peaceful protesters yesterday at two locations in Lagos. The killings took place in Lekki and Alausa, where thousands were protesting police brutality as part of the #EndSars movement.”

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President Muhammadu Buhari also disclosed last week that 51 civilians, 11 Police officers, and 7 soldiers have been killed in the unrest.

The IGP said today that, “Officers of the Nigeria Police Force acted professionally, exercised commendable restraints and some paid the supreme price for peace during the recent protests and ensuing violence in some parts of the country.

“The Amnesty Int’l report is untrue, misleading, and contrary to all available empirical evidence.

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“Even when the protests turned violent in some parts of the country, the officers still maintained utmost restraint and did not use excessive force in managing the situations.”

The IG added that 22 Police personnel were killed by hoodlums, with many more injured and that 205 police stations were attacked.

“Available reports show that twenty-two (22) police personnel were extra-judicially killed by some rampaging protesters and scores injured during the protests. Many of the injured personnel are in life-threatening conditions at the hospital.

“Two hundred and five (205) police stations and formations including other critical private and public infrastructure were also damaged by a section of the protesters,” he said.

The IG said Amnesty International failed to pay tribute to police officers who lost their lives in the violence and accused the organization of “discriminatory tendencies.”

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