Tariff increase won’t stop power crisis, consumer group tells FG

Electricity consumers have asked the Federal Government to apply caution in its plans to hike electricity tariffs, saying it will not end power outages.

The group under the aegis of the Nigeria Consumer Protection Network said tariffs should not be increased unless there is improved power supply to all consumers, regardless of the band they belong to.

In an interview with our correspondent, the President of the Nigeria Consumer Protection Network, Kola Olubiyo, recalled how Nigeria celebrated 5,600 megawatts of power generation in 2013, regretting that the achievement could not be sustained because it was a fluke.

According to him, the demand for electricity in Nigeria has remained higher than the supply.

“So, what it means is that an increase in electricity tariffs alone is not a silver bullet solution to the challenges of the power sector,” he warned.

Olubiyo argued that the national grid would collapse if attempts were made to pick a load of 5,800 MW or 6,000 MW.

He said, “As I speak to you now, if you attempt to pick a load of 5,800 MW or 6,000 MW, the grid will collapse. I’m speaking to you in my capacity as a member of the Technical Investigative Panel on Power System Collapses.

“So, from the benefit of insight, I’m saying the grid is stagnated, is limited, and is full of inefficiencies. And between 2013 to date, we have 20 years, but our government has sought enormous foreign loans to invest in the grid.”

The consumer rights activist disclosed that the transmission leg of the tripod of the power sector is still in the hands of the government to give justification for obtaining foreign loans.

He added,“Yet, we’ve not been able to even add an additional 400 MW to the 5,600 MW peak that we have achieved, despite a huge amount of money that is not less than $10bn in the last 10 years.

“So, even when this tariff is increased now, there’s no guarantee that it’s going to come with any improvement in power supply. We are talking about having cost recovery when investors put in their money. At the downstream, what cost are we recovering when investors are not investing money?

“Even if the tariff is raised to N1,000 per kilowatt-hour, it’s not going to guarantee service efficiency; it’s not going to guarantee improvement in customer centricity and service delivery. It’s not going to guarantee revenue optimisation.

“Revenue will be jacked up by a two-thirds increase or 300 per cent increase; the revenue figure will be ballooned. But what I’m trying to say in essence is that it’s not going to be commensurate with the service level agreements and improvement in service delivery. Because if you want to share 5,600 MW of stagnated generation growth or capacity among the nation’s population per capita ratio, it’s stagnated. So, increasing tariffs will not translate to a game changer,” he stated.

He charged the government and investors to enhance power infrastructure and meter all customers before thinking of tariff hikes.

President Bola Tinubu’s Special Adviser on Energy, Olu Verheijen, had hinted at a possible tariff hike in the coming months.

Verheijen said though the hike may not be 65 per cent, the government would stop subsidising electricity consumed by the rich.

According to her, the N200bn monthly electricity subsidy benefits only the wealthiest 25 per cent of Nigerians, sidelining the poor.

She added that the common masses would be protected in the planned subsidy removal.