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FG stands firm on power tariff hike despite opposition

Labour Unions Criticize Move as Confrontations Loom

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The Federal Government stood its ground on Friday, affirming its decision to implement a 240 per cent hike in power tariffs for consumers in the ‘A’ category, despite mounting calls for its reversal.

The contentious decision, announced by the government on Wednesday, met swift opposition from various quarters, including the Nigeria Labour Congress (NLC), which labeled it as “wicked and unpopular.”

Benson Upah, Head of Information at NLC, warned the government to brace for the repercussions of its decision, accusing it of succumbing to external pressures from international financial institutions like the World Bank and the International Monetary Fund.

In response to the criticisms, Adebayo Adelabu, Minister of Power, defended the tariff hike, citing the unsustainable burden of power subsidy on the government. He disclosed that the subsidy for 2024 alone would amount to a staggering N2.9tn, constituting over 67 per cent of the cost of electricity production, transmission, and distribution.

Adelabu emphasized that the subsidy on electricity would be a short-term measure, with a transition plan aimed at achieving a full cost-reflective tariff within three years. He underscored that the withdrawal of subsidy from band A customers was just the initial phase of the plan.

Despite the government’s rationale, the move sparked outrage among consumers, manufacturers, and labour unions, who fear the adverse economic impact of the tariff hike. Many argued that it would cripple businesses, exacerbate inflation, and jeopardize the livelihoods of ordinary Nigerians.

The controversy escalated when the Abuja Electricity Distribution Company Plc (AEDC) prematurely applied the new tariff rate to all consumer bands under its franchise areas, prompting the Nigerian Electricity Regulatory Commission (NERC) to impose a hefty fine of ₦200m on the company for non-compliance.

In response to the regulatory intervention, NERC mandated the AEDC to reimburse affected customers and rectify the billing discrepancies promptly.

As tensions mount and confrontations loom, the Nigerian government finds itself at a crossroads, torn between economic pragmatism and popular discontent, with the fate of its energy policy hanging in the balance.

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