FG approves increase in electricity tariff

The federal government of Nigeria has approved an increase in the electricity tariff
Ernest Sunday

President Muhammadu Buhari has approved the proposed increase in electricity tariff, which was announced early this year by the Nigerian Electricity Regulatory Commission (NERC).

Although the increase in the electricity bill, according to the Nigerian Electricity Regulatory Commission, was supposed to take effect in April 2020, it was delayed due to the coronavirus outbreak.

The tariff will only take effect in residential areas, which are classified as "rich," while the regions classified as "poor" will not be affected by the increase.

The newly approved tariff increase is expected to take effect starting from September 1, 2020, and will be subjected to a quarterly review.

According to NERC, Abuja Electricity Distribution Company (AEDC) residential customers R3 category will be paying N47.09 per unit and N63.42 by next year instead of their usual N27.20 per unit.

For the Ikeja Electricity Distribution Company (IKEDC) customers the R3 category will be N36.49 per unit and later N58 instead of N26.50 per unit.

President Buhari also approved a one-year waiver of 35 per cent import tax for prepaid meters. The approval of the prepaid meters was to ensure accurate electricity billing.

The approval was made possible due to a request by Zainab Ahmed, minister of finance, to ensure the provision of prepaid meters under the meter asset providers (MAP) scheme.

The special adviser to the minister on media and communications Yunusa Abdullahi, in a statement, said the application of the levy on imported meters had caused a setback in the implementation of meter asset providers (MAP) scheme.

“The 35 per cent levy was imposed on the recommendation of the Federal Ministry of Industry, Trade and Investment, to encourage local production, as well as protect investments in the local assembly of electricity meters,” Abdullahi said.

“An important feature of the MAP regulation is a gradual upscaling of the patronage of local manufacturers of electricity meters with an initial minimum local content of 30 per cent with the potential of significant job creation in the area of meter assembly, installation and maintenance.

“Even though the 35 per cent was in existence since 2015, the MAP regulations by NERC in 2018 to bridge current electricity metering gap did not factor the 35 per cent levy in arriving at the regulated cost of electricity meters to end-users (consumers).

“This is to immediately bridge the gap between the demand for electricity meters and local supply. It is also envisaged that this will provide protection for local electricity meter manufacturers and the opportunity to ramp local capacity in the production of meters.”

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