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Wednesday, November 29, 2023

NLC warns Tinubu’s government against increasing electricity tariff as Nigerians spend N247.33bn on power supply three months

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The Nigeria Labour Congress (NLC) has warned the President Bola Ahmed Tinubu-led federal government to abandon its plans of implementing higher electricity tariffs in the country.

It was reported that the government is set to increase electricity tariffs by over 40 percent from July 1, 2023.

This rise follows the unification of the naira which has led to the depreciation of the naira at the investor and exporter window. 

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However, in an official statement by NLC President Comrade Joe Ajaero, the organisation expressed deep concern over the proposed 40% increase in electricity tariff scheduled to take effect on July 1st.

The NLC condemned the move, describing it as insensitive and callous, indicating a blatant disregard for the welfare of consumers, particularly those living in poverty.


“The significant increase is being justified as a response to the over 100% surge in the pump price of premium motor spirit (pms). However, when we examine the details, we observe a rise in inflation from 16.9% to 22.41% (with the potential to reach 30%), as well as a shift in the exchange rate from N441 to N750. Nevertheless, we firmly believe that even these figures fail to justify this reckless proposed tariff increase,” stated the NLC.

The NLC emphasised that factors such as consumers’ ability to pay and the quality of service provided are crucial considerations that outweigh any justifications based on market logic.

“The inherent risk in the new regime of tariff is that there is no control, implying that by August, consumers will pay new rates.

“The other risk is that by the time other product or service-rendering entities come up with their new prices or rates, the ordinary person would have been compacted into dust,” the statement partly read.

Additionally, the NLC pointed out that when other product or service providers adjust their prices or rates accordingly, ordinary citizens will bear the brunt of these burdensome costs.

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“The service providers in spite of sundry support have not been able to meet the threshold of 5000 megawatts.

“Coupled with this, there have been surreptitious increases without notice in violation of statutes.

“We would like to urge the advocates of the market economy, who have resorted to hurling insults at the NLC, to examine their conscience. The path they are currently pursuing is highly confrontational and volatile. Considering the impending rise in tertiary institution fees, increases in privately-owned educational institutions, and the forthcoming surge in other costs and tariffs, life in Nigeria could truly become Hobbesian,” warned the NLC in its statement.

Meanwhile, the National Bureau of Statistics has revealed that in the first three months of 2023 (January to March), Nigerians paid N247.33 billion for electricity to 11 distribution companies (DisCos).

According to data, the amount generated by the DisCos from Nigerians increased by 20.81% year-on-year.

During the corresponding period in 2022, over N204.74 billion was expended by Nigerians on electricity supply, while N232.32 billion was generated by the DisCos in the fourth quarter (Q4) of 2022.

The increase in revenue generated by the DisCos occurred despite the decline in electricity supply, from 5,956 (Gwh) reported in Q1 2022, to 5,852 (Gwh) in Q1 2023.

Although, there was an increase in supply quarter-on-quarter, as the supply in the fourth quarter last year was 5,611 (Gwh).

“Revenue collected by the DisCos during the period was N247.33 billion from N232.32 billion in Q4 2022,” the NBS report reads.

“On a year-on-year basis, revenue generated in the reference period rose by 20.81 percent from N204.74 billion recorded in Q1 2022.

“Electricity supply was 5,852 (Gwh) in Q1 2023 from 5,611 (Gwh) in the previous quarter,” the report stated, adding, “However, on a year-on-year basis, electricity supply declined by 1.74 percent compared to 5,956 (Gwh) reported in Q1 2022.”

In the last five quarters, N247.33 billion revenue recorded in Q1 2023 is the highest, compared to N204.7 billion in Q1 2022, and N188.41 billion in the second quarter last year.

It was also higher than the N202.62 billion turnover reported between July to September (Q3) 2022 and the N232.32 billion generated in Q4 2022.

Other key points to know

The total number of customers increased slightly by 1.89% quarter-on-quarter to 11.27 million in Q1 2023, from 11.06 million in the fourth quarter of last year.

Also, on a year-on-year basis, the total number of customers increased by 5.99% from 10.63 million reported in the first quarter of 2022.

Furthermore, NBS reported that “metered customers stood at 5.31 million in Q1 2023, indicating a growth of 3.61 percent from 5.13 million recorded in the preceding quarter.

“On a year-on-year basis, this grew by 10.86 percent from the figure reported in Q1 2022 which was 4.79 million.”

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