The Institute of Chartered Accountants of Nigeria (ICAN) has called on the federal government to suspend the increase in electricity tariff for Band A customers, describing it as an additional burden on the masses.
This is contained in a press statement by the president of the institute, Innocent Okwuosa, on Thursday.
According to Okwuosa, the electricity rate is coming at a time where the populace is battling with high inflation, exchange rate and the removal of fuel subsidy, among others.
He noted that the rate would only amount to an additional suffering on the citizens, adding that the government should first challenges facing value chain of the power sector.
“The position of Institute of Chartered Accountant of Nigeria (ICAN) is that NERC should suspend the hike in electricity tariff for any band of consumers and urgent steps be taken to address some if not all the challenges of the electricity distribution value chain which have been identified above.
“This is because the citizens have been grappling with the huge burden of the bold economic policies of this administration ranging from removal of fuel subsidy, unification of exchange rate and rising dollar rate, hike in interest rate, the inflationary pressure, especially food inflation among others.
“There is therefore no iota of capacity on the part of the masses to bear any further burden arising from a hike in electricity tariff,” Okwuosa said.
In addition, ICAN’s president recommended that the federal government address the monopoly of the power distribution companies (DisCos) to bolster the supply chain in the power sector.
According to him, the federal government should introduce more players in the distribution segment of the power sector to encourage competition and optimize the choice of the consumers.
Okwuosa said this will lead to competitiveness and ultimately price reduction.
“Government should work to introduce competition to consumers by allowing more than one DisCo to operate in an area. Nigeria electricity consumers do not have the opportunity to switch to another DisCos as it is done in other climes.
“They are tied to one DisCo, a case of monopoly of electricity suppliers. In other climes, consumers can switch to other energy suppliers if they are not happy with the pricing or services of the electricity providers,” he added.
Earlier in March, the Nigerian Electricity Regulatory Commission (NERC) raised the electricity tariff for customers in the Band A category from N66 per kilowatt-hour to N225.
Musliu Oseni, the Vice Chairman of NERC, mentioned that these customers make up 15% of the country’s 12 million electricity consumers.
He also noted that because the required electricity supply hours were not met, the commission has reclassified some Band A customers to Band B.
Subsequently, NERC confirmed the approval of an 8.1% reduction in the electricity tariff rate for customers in the Band A category across all power distribution companies in the country (DisCos).
The tariff decreased from 225/kWh to 206.8/kWh, which equates to an 8.1% reduction, and is attributed to the relative appreciation of the Naira in the official foreign exchange window.
