Tariff Hike Piles More Pain on Struggling Nigerians

Thedailycourierng

Tariff Hike Piles More Pain

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The Tinubu administration’s recent move to withdraw electricity subsidies for the highest band of residential consumers could not have come at a worse time for millions of Nigerian households already grappling with skyrocketing costs of living.

Last week, Tariff Hike Piles More Pain as the government announced a shocking 240% increase in electricity tariffs for so-called “Band A” customers, which make up around 15% of the country’s 12.8 million power consumers. These households, which were previously paying N68 per kilowatt hour, now must cough up a staggering N225/kWh for their power supply.

The cruel irony is that this massive tariff hike was sold as a way to improve electricity access and reliability for this category of Nigerians, who were promised at least 20 hours of daily power supply. But in a nation plagued by dilapidated infrastructure and notoriously unreliable services from the privatized distribution companies (Discos), such guarantees ring hollow.

What is crystal clear, however, is that this policy represents a devastating new burden on Nigerian families at a time of intense financial strain driven by soaring food prices, fuel costs, transportation costs, and broader inflation running at multi-decade highs. With the minimum wage still stuck at a paltry N30,000 per month, how are ordinary citizens expected to absorb utility bills that could easily top N20,000 for modest consumption levels?

The government claims this move will save it N1.5 trillion this year and improve liquidity for the power sector. But at what cost to the average Nigerian’s quality of life? Prioritizing industry profits over the welfare of the masses seems badly misguided when so many are struggling just to keep food on the table.

There are also serious questions about using the blunt instrument of tariff hikes to drive the long-stalled metering program. While closing the 7 million+ meter gap is crucial for fairness and transparency, penalizing consumers is a counterproductive way to incentivize the Discos to finally do their job and deploy meters at scale.

Instead of squeezing already over-burdened citizens, the administration should be exploring strategies to directly compel the Discos to rapidly meter homes while exploring alternative subsidy models to keep electricity affordable for the masses. Allowing market forces to determine costs is one thing, but heaping more misery on the people during this brutal cost-of-living crisis is unconscionable.

Nigerians were hopeful that the new government would bring fresh solutions to longstanding issues like the moribund power sector. But this draconian tariff adjustment, while purportedly aiming to revive an ailing industry, has severely dented that optimism and handed the masses yet another heavy cross to bear. The people deserve better than having their living standards further degraded in service of industry interests.

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Reference

Tariff hike: FG plans N1.5tn savings, 2.5m meter installations published in Punch

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