The DG, the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf, has called on the FG and electricity distribution companies (DisCos) to adopt a strategic approach to the nation’s electricity pricing, so as to facilitate a smooth transition to new electricity pricing regime.
He made this appeal during an interview with the News Agency of Nigeria (NAN) in Lagos on 5 January 2021.
Reacting to the recent statement by the management of the Nigerian Electricity Regulatory Commission (NERC) that there was no 50 per cent increase in electricity tariff as widely reported in some media, Dr Yusuf emphasized that the government should ensure there is a smooth transitioning to the new pricing regime, in order to minimise shocks and risk of pushback from the consumers.
The LCCI DG explained further that the commercial arguments for a hike might be strong, as there was need for the importance of reckoning with the economic, social and political ramifications of such price reviews.
Hence, in this regard, the Government needs to be strategic and gradual while implementing the transition framework to the new pricing regime. He advised that to facilitate a smooth transition, the contexts of the transition should have a moderate effect on price movement at this time, as electricity is a product of high social significance.
What they are saying
Dr Muda Yusuf, in his words, said:
- “Context matters in policy conceptualisation and implementation, and we need to worry about social and economic contexts. These contexts should have a moderating effect on price movement at this time, especially for a product of high social significance. It is important to take these factors into account in order not to put the entire reform process at risk.”
What you should know
- In October 2020, after series of backlash at the back of the increase in electricity tariff, the Federal Government and the organized Labour agreed to provide a tariff relief of N10.20 per kilowatt-hour for Nigerians for the next 3 months.
- In line with the resolution made by the FG and Labour union, the immediate relief would be provided to citizens for a 2 to 3-month period (which will not exceed December 31, 2020), as this timeline would be used to conclude an extended scope of work for the Technical Committee.
- However, in the recent statement made by the management of NERC, the Commission revealed that in compliance with the provisions of the EPSR Act and the nation’s tariff methodology for biannual minor review, the rates for service bands A, B, C, D and E have been adjusted by NGN2.00 to NGN4.00 per kWh to reflect the partial impact of inflation & movement in forex.