The federal government has stated that there is no going back in the removal of subsidy on petroleum products, while electricity distribution companies (DisCos) pay deaf ears to the lamentations of Nigerians at this Covid-19 pandemic period. This has left Nigerians gasping for breath. PAUL OKAH reports.
There is no gainsaying that the Covid-19 pandemic took a great toll on the Nigerian economy, leading to loss of jobs/incomes, slashing of salaries, non- payment of salaries by private businesses and many more.
While Nigerians were still counting their losses and bracing up for more challenges occasioned by the effects of the pandemic, the increase in premium motor spirit (PMS), commonly called fuel, and the hike in electricity tariff are bitter pills to swallow.
Fuel price increase
Last week, the Nigerian National Petroleum Corporation (NNPC) increased the pump price of PMS to marketers from N138.62 per litre to N147.67, leading to many filling stations selling at N160, N165 or N170 per litre.
The situation has also led to PMS being sold at N200 per litre at the black market, with many Nigerians lamenting that the increment is coming at a time when many families are still struggling to make ends meet in their businesses and work places.
Speaking with Blueprint Weekend, a civil servant in the Federal Capital Territory (FCT), Mr. Joseph Ikenna, lamented that motorists have already increased transport fares as he had to pay double while travelling home last week.
“I don’t know what is happening in this country. I had to pay N9, 000 just to travel to my village in Abia last week, something that was N5,000. Of course, the transport company gave the excuse of increment in fuel price.
“It is as if motorists were just waiting for a little increase in fuel price to double the fare. I really wish the government could do something about this. If we can spend so much at this time, I really wonder how the Christmas period would be. It is not funny at all,” he said.
Similarly, a businessman, Mr. Ahmed Yusuf, said fuelling his car and generating set is now a great challenge because of the hike in fuel price amid low income.
“Apart from my area in Nyanya not getting steady power supply, I also have to fuel my car every day to enable me to run my business effectively. I have never been this worried by a development like this,” he said.
Electricity tariff hike
DisCos on Tuesday, September 1, began a three-month electricity tariff hike implementation as approved by the Nigerian Electricity Regulatory Commission (NERC), despite the effects of the Covid-19 pandemic. NERC had said the DisCos must consult with customers first, and that the hike will not affect consumers who do not get 12-hour power supply daily for a month, while the new tariff order will end on January 1, 2020, when sources in the power industry are expected to approve another hike for the power firms.
The three DisCos, Kaduna Electric, Ikeja DisCo and Eko DisCo, which had submitted their amended Performance Improvement Plans (PIPs) to NERC for approval as basis to raise their rates, were the ones that were granted initial approval.
According to the schedule for Ikeja DisCo, NERC said, “Following consultations and directions on tariff policy, NERC hereby approves a deferment of the applicable tariffs for customers in service band D and E (that is customers with a service commitment of less than an average of 12 hours supply per day over a period of one month) for the period September 1, 2020 to January 1, 2021.
“Accordingly, Ikeja DisCo shall continue to charge customers in Bands D and E the tariffs applied prior to this Order, and shall only be allowed to charge the approved tariffs in this Order upon investments that improve quality of service experience thus migrating customers to higher service bands or another Order of the Commission.”
In a similar NERC Tariff Order for Eko DisCo, it grouped the customers according to A to E with the C to E customers having 12 hour supply down to four hour daily, and charged them not to hike tariff for those below 12-hour power daily supply.
Kaduna Electric also hiked its electricity tariff. In its Tariff Order approved by NERC, it stated that, “From Tuesday, September 1, 2020, the new Service Reflective Tariff will take effect. The above tariff is from September to December, 2020.
While there is no increase for Band D and E customers, the schedule showed that the tariff for Band A rose to as high as N56.31/kwh from about N40 previously.
In a chat with this reporter, an Abuja-based Nollywood star from Ebonyi state, Mr. Delaw Eze, said he recently bought units for his prepaid metre only to realise that there had been a 50 per cent tariff hike.
“I just subscribed for N5, 000 light and I got only 93 units, which was N2, 500 light before now. Now, N2, 500 light is N5, 000. We are in deep trouble in Nigeria,” he said.
Similarly, a hairdresser in Jahi, a satellite town in the FCT, Mrs. Aisha Musa, said her business has taken a plunge for the worse since the Covid-19 pandemic and wondered how to fare in the face of electricity tariff hike.
She said: “This is actually the worst time to be a Nigerian. With prices of goods and services skyrocketing at a period of economic downturn, hiking electricity and fuel is the worst thing government has done so far.
“I use many electrical appliances as a hairdresser and they all consume kilowatts. With this recent increment in tariff, how will I fare? I usually spent N10, 000 on electricity in a month, but I got half of the unit when I recharged yesterday. It means I will now have to spend more than N20, 000 per month. I see trouble looming.”
An expert’s view
On September 7, in an interview with the News Agency of Nigeria (NAN) in Lagos, an environmentalist and founder of Bridge-that-gap Initiative, Mrs. Gloria Bulus, suggested the adoption of renewable energy as an alternative for Nigerians to quell the effects of the recent hike in electricity tariffs.
She said the hike has made it imperative for Nigerians to adopt green energy alternatives not just for monetary reasons, but for the preservation of the environment.
“The recent hike in electricity tariff is enough to influence us to adopt renewable energy because by the time we begin to pay electricity bills at this current rate, most people will discover that a large amount of their earnings go to electricity.
“The green energy is our only bailout in Nigeria and now is the time to go 100 per cent renewable. Climate change experts and advocates as well as environmentalists, have been hammering on a transition to renewable energy alternatives.
“Maybe this increase has happened so that Nigeria can forcefully embrace renewable energy. Renewable energy is cheaper, cleaner, does not deplete the environment, sustainable, available and can reach as many as possible.”
She said further that, “Renewable energy can only be available and affordable to the average Nigerian if they are empowered to produce their own electricity. For example, harnessing waste to energy, hydropower electricity, wind among others. This way the average Nigerian will not be dependent on Government or any company for their electricity.
“If Nigeria can switch to 100 per cent renewable energy, we will not be so concerned about the hike in electricity tariff. It is unfortunate that even with the epileptic power supply in the country, the tariff is constantly increased.
“This is where the government needs to transit to 100 per cent renewable energy. The role of government is to make an efficient transition to renewable energy easy thereby making life better for the citizens.”
NLC, others threaten protest
The Senior Staff Association of Nigerian Universities (SSANU) has meanwhile warned that except the federal government addressed the recent hike in fuel and electricity tariff, the non-teaching staff in collaboration with the Nigeria Labour Congress (NLC) would engage government in peaceful protests nationwide, with a view to forcing the government to rescind its decision.
The national vice-president of SSANU, Mr. Alfred Jimoh, at a press conference at the University of Ibadan said the union could not but comment on the recent issues of the ill-advised increment in the pump price of PMS and the electricity tariff.
SSANU noted that Nigerians that are just battling the agony of insecurity and Covid-19 without any visible and empirical succour or palliatives from the government, is now being visited with the double tragedy, adding that, it was a trite of reality that these two commodities are key to the economy and touch on the lives of every Nigerian.
He noted further: “Why would a government that claims to be responsive to the sufferings of its people choose a time like this to add more pains to their agony and trauma? It is on record that this government rode to power through the popular mass protests against similar action taken by Jonathan administration in 2012. With this action, it does appear that the APC government is taken Nigerians for granted.
“Be that as it may, and as you all know, the organised labour and the civil society collaborators are seriously mobilising to engage the government in a peaceful, nonviolent protests across the nation. SSANU is a member of the Nigeria Labour Congress (NLC) and we are fully ready to carry out the directives of our centre (NLC) as soon as we receive the signal.”
FG’s reaction
President Muhammadu Buhari said on September 7 that it would be “grossly irresponsible” to borrow to subsidise electricity tariff amid the economic crunch caused by the lockdown occasioned by the Covid-19 pandemic. The president, who stated this during his second-term First Year Ministerial Performance Review Retreat in Abuja, noted that under the new arrangement, only customers who get electricity for 12 hours and above per day would have their tariff increased.
He also said no provision was made for fuel subsidy in the Revised 2020 Budget, adding that about N1.7 trillion had been spent on tariff shortfalls to support the electricity sector since its privatisation.
He stressed that “the timing of these two necessary adjustments” was coincidental, but gave the assurance the government was not insensitive to their plights and would continue to do all it could to make life better for the masses.
He said, “The Covid-19 has led to a severe downturn in the funds available to finance our budget and has severely hampered our capacity. One of the steps we took at the beginning of the crisis in March when oil prices collapsed at the height of the global lockdown was the deregulation of the price of premium motor spirit such that the benefit of the lower prices at the time was passed on to consumers.
“The effect of the deregulation is that pump prices of petrol will change with the changes in global oil prices. This means quite regrettably that as oil prices go higher, we could see some increases in pump price. When global prices rose, it meant that the prices of petrol locally would also go up.
“There are several negative consequences if the government should go back to the business of fixing or subsidising petroleum or PMS prices. First of all, it will mean a return to the costly subsidy regime. Today, as we’ve heard, we have 60 per cent less revenue. We simply cannot afford the cost.
“The second danger is the potential return of fuel queues which has thankfully become a thing of the past. Nigerians no longer have to endure long queues just to but petrol often at highly inflated prices.
“Also, there is no provision for fuel subsidy in the revised 2020 budget simply because we are not able to afford such a cost. If reasonable provision must be made for health, education, and other social services, we simply cannot sustain petroleum subsidies.”
Continuing the president said: “The recent service-based tariff adjustment by the discos has also been a source of concern to many of us. Let me say frankly like many Nigerians, I have been very unhappy with the service by many of the discos. But there are many constraints including poor transmission and distribution capacities. I’ve already signed off the first phase of the Siemens Project to address many of these issues.
“Because of the problems of the privatisation exercise, the government has had to keep supporting the largely privatised electricity industry. So far, to keep the industry going, we have spent close to N1.7 trillion, especially by way of supplementing tariff shortfalls. We simply do not have the resources at this time to continue in this way. And it will be grossly irresponsible to borrow to subsidise generation and distribution which are both privatised.”
