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50 Per Cent Electricity Tariff Cut: Manufacturers Insist On Old Rate

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WHEN the Federal Government announced the cut in electricity tariff by 50 percent recently, not many Nigerians were exited about it.

While some said it was a political measure taken to ensure victory for President Goodluck Jonathan during the just concluded presidential election, others were indifferent because they felt it will not reflect in their monthly electricity bills, as the power distribution companies continued to be unrelenting with their “crazy bills” The mix feelings among Nigerians remained the same until the Electricity Regulatory Commission came up with clarification, saying the tariff cut would only affect industrial consumers.

It is expected that operators in the real sector will have a sigh of relief. The President of the Nigeria Manufacturers Association (MAN), Dr. Frank Udemba Jacobs told The Guardian on Friday that his members were not exited about the cut in the electricity tariff, as he insisted that the distribution companies betrayed the earlier agreement they entered into with MAN He urged the electricity companies to comply with the terms of their agreement with the manufacturing sector by reverting to the old tariff, which was prevailing before the reform of the power sector According to the MAN president, the electricity companies had an agreement with the manufacturers during the reform period that Multi Year Tariff Order (MITO) of 2.0 would remain until 2017, adding that they were shocked when the companies introduced MITO 2.1, which jacked up tariff for companies by 100 percent, contrary to their agreement.

“When they were trying to privatize the power sector, there was an agreement between the operators and the distribution companies that there will be no tariff increase until 2007 and unless they negotiate with customers,” he said, adding that with the agreement the companies were supposed to open an office to receive complaints and to initiate negotiation for a minimal tariff increase.

“The Discos must consult consumers before they can increase their tariff. They increased our tariff by 100 percent when our MITO 2.0 is expected to lapse in 2017. They suddenly jumped to MITO 2.1 and now a 50 percent reduction. We are happy at it, but we are not satisfied.

They should go back to tariff under MITO 2.0, which was satisfactory to us and until 2017 when it will lapse, then we can sit down with them to negotiate,” he insisted He said the distribution companies were doing all these amidst irregular power supply, which had since forced some manufactures to go into self-power generation.

“ The power supply is even very irregular. “Sometimes for three weeks there will be no supply to my factory in IMO, we run on generator. When they managed to supply us power, it is either half current or fluctuating current. Many companies are now generating their own power. So if they continue to increase their tariff, they will price themselves out of the market, because nobody will patronise them.

The should negotiate and discuss with consumers before they increase tariff” On the expectations from the emerging new political dispensation, the MAN president urged the new government to continue with the power sector reform by improving the power transmission network, which, he said, lacks adequate infrastructure to transmit power generated by generation companies.

‘The government should continue with the power sector reform to make it 100 percent private sector, because many companies have disconnected from the national grid and are now generating their own power.” The Director General of Textile Manufactures Association of Nigeria, Jaiyeola Olanrewaju, who also spoke with The Guardian on the tariff cut described it a desirable development, adding that it was too early to observe the impact on cost of production “The impact on production cost is going to be positive because electricity is one of the major impute in this industry.

Some of our members have been complaining that they increase tariff by 40 percent, 30 percent, depending on the distribution company. They also need to address the irregularity of power supply, because we have been using generator to supplement the irregular supply.

We are happy about the development, but how much it will affect us positively is what I can not say now” he said. While reacting to allegations that distribution companies had been cheating industrial users over a long period of time, the Chairman, Nigerian Electricity Regulatory commission (NERC), Dr. Sam Amadi, said “DISCOs can only charge the tariff approved by NERC, it is when the charge is higher than that stipulated by NERC that it becomes cheating. The tariff will kick off in April, it took so long to arrive at this decision because reviews are like laws, you make rules, it works, but if there is a problem, you go back and look at it again to create a better solution.”

However, residential consumers should not expect a tariff reduction anytime soon, going by what the commission said. “Residential consumers may not see a difference in price, but what we have done is to leave the tariff charge unchanged, rather than increasing it,” Amadi said.


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