‘It Pushes Up Inflation,’ NLC Demands Reversal In Hike Of Electricity Tariff

The Nigeria Labour Congress (NLC) says electricity tariff hike pushes up inflation, insisting that the recent increase by the Nigerian Electricity Regulatory Commission (NERC) and distribution companies in the country must be immediately reversed.

“Unknown to people, this issue of tariff increase is determined by inflation and the value of the currency,” NLC President Joe Ajaero said on Channels Television’s The Morning Brief show on Tuesday.

“NERC takes these two major variables to determine tariff increase. Unknown to the same NERC, each time you increase tariff, it leads to another inflation which within few months, they would see demand for another tariff increase. And this is happening on and on and there is no control over it.”

On April 3, 2024, NERC raised electricity tariff for customers enjoying 20 hours power supply daily. Customers in this category are said to be under the Band A classification. The increase saw the customers paying N225 kilowatt per hour from the current N66, a development that has been heavily criticised by many Nigerians, considering the immediacy of the tariff hike and the current hardship in the land.

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Following the outrage, NERC asked discos to cut down electricity tariff rate by 8.1% for customers under Band A category. The outrage, however, persisted with many Nigerians rejecting the reduction and demanding a total reversal of the tariff hike. The NLC and the Trade Union Congress (TUC) subsequently picketed NERC offices and discos on Monday to press home their demands.

Ajaero, on Channels Television’s programme on Tuesday morning, kicked against the “politics of reduction” embarked upon by NERC in recent times. He said reduction after tariff increase won’t stand, insisting that NERC and discos must first reverse the tariff to the old rates and come to the negotiation table with labour unions and other stakeholders on an agreeable way forward.

He wondered how that the government now talk about trillions of naira in subsidy of the power sector post-privatisation when there was no subsidy before the privatisation of the power sector.

He said, “The investors they brought in the first instance, and I say this without apologies, are not the people that were the right investors with the technical competence, with managerial ability to attract foreign direct investment. You can see that after 12 years of privatising the sector, no direct investment is coming into the sector.”

The NLC boss said because of the long-term nature of investment in the power sector before profit, “all over the world, the state drives the process of developing the sector” and “not to just transfer the burden on the poor masses”.

Ajaero said it is important to look at the state’s withdrawal from the sector whether it was right at the time it did. “Why do you sell it in the first instance when after the sector was sold at N400bn and the Nigerian state has invested about N2trn in the sector?” he queried.

Prices of food and basic commodities have gone through the roof in the last weeks, as Nigerians battle one of the country’s toughest economic crises sparked by the current government’s twin policies of petrol subsidy removal and unification of forex windows.

According to the National Bureau of Statistics (NBS), Nigeria’s inflation rate jumped to 33.20% in March 2024 compared to February 2024 headline inflation rate which was 31.70%. The inflation for March 2024 was largely driven by increase in food such as garri, millet, yam, bread coupled with energy and housing costs.

The Organised Labour has maintained that Nigerians cannot be subjected to more hardship with fresh electricity tariff hike when cost of living has gone through the roof. Labour also insisted that the President Bola Tinubu administration must approave ₦615,000 as the new living wage, away from the ₦30,000, described as grossly insufficient.