President Muhammadu Buhari, on Tuesday, approved the
implementation of the proposed cost-reflective electricity tariff for the
Nigerian Electricity Supply Industry (NESI).
However, residential areas classified as “poor” will not be
affected by the increase in tariff.
Also, Buhari has approved a one-year waiver of 35 per cent
import tax for prepaid meters.
In January, the Nigerian Electricity Regulatory Commission
(NERC) had announced that there would be an upward review of electricity
tariffs across the country from April 1.
However, it directed electricity distribution companies
(DisCos) to suspend the proposed tariff increase in March as a result of the
COVID-19 pandemic.
In June, the national assembly had persuaded the DisCos to
defer the plan till the first quarter of 2021 because of the pandemic on energy
consumers.
Senate President Ahmad Lawan had maintained that consumers
should be properly metered before the tariff hike is implemented.
With the approval of the president, the new tariff regime is
expected to kick off on September 1 and to be reviewed quarterly.
This is said to be a requirement for the approval of a
proposed $1.5 billion World Bank loan for the power sector.
According to the new tariff via a NERC order dated December
31, 2019, Abuja Electricity Distribution Company (AEDC) residential customers
R3 that were paying N27.20 per unit will now pay N47.09 and N63.42 by next
year.
For the Ikeja Electricity Distribution Company (IKEDC)
customers, the R3 category paying N26.50 per unit will now pay N36.49 per unit
and later N58.
Meanwhile, Buhari approved a one-year waiver of 35 per cent
import tax on prepaid meters to facilitate increased provision to consumers for
accurate billing.
The approval was as a result of the request by Zainab Ahmed,
minister of finance, to fast-track the deployment of prepaid meters under the
meter asset providers (MAP) scheme.
In a statement, Yunusa Abdullahi, special adviser to the
minister on media and communications, said the application of the levy on
imported meters has created a significant challenge to the smooth
implementation of 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 up
scaling of the patronage of local manufacturers of electricity meters with an
initial minimum local content of 30 percent with the potential of significant
job creation in the area of meter assembly, installation and maintenance.
“Even though the 35 percent was in existence since 2015, the
MAP regulations by NERC in 2018 to bridge current electricity metering gap did
not factor the 35 percent 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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