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Rich Nigerians To Pay More As Buhari approves new tariff on electricity

Rich Nigerians To Pay More As Buhari approves new tariff on electricityRich Nigerians To Pay More As Buhari approves new tariff on electricity

Poor people will be exempted from the new electricity tariff that President Muhammadu Buhari approved.
President Muhammadu Buhari has approved the introduction of the Nigerian Electricity Supply Industry (NESI) proposed cost-reflective electricity tariff.

Tuesday Buhari gave his approval.

Rich people will pay more according to TheCable while those listed as “poor” will not be affected by the tariff increase.

Buhari has also approved a one-year waiver for prepaid meters of 35 per cent import charge.

The Nigerian Electricity Regulatory Commission (NERC) reported in January that electricity tariffs will be revised upward across the country  April 1.

Nevertheless, as a consequence of the COVID-19 pandemic, it ordered the electricity distribution companies (DisCos) to postpone the planned tariff increase in March.

In June, because of the pandemic on energy users, the national assembly had convinced the DisCos to delay the proposal until the first quarter of 2021.

Senate President Ahmad Lawan had argued that customers should be metered adequately before the tariff hike was enforced.

The new tariff regime is set to kick off on September 1 with the president’s approval, and be reviewed quarterly.

That is said to be a prerequisite to support a planned $1.5 billion loan from the World Bank for the power sector.

Abuja Electricity Distribution Company (AEDC) residential customers R3 who charged N27.20 per unit will now pay N47.09 and N63.42 by next year, according to the new tariff through a NERC order dated 31 December 2019.

For customers of the Ikeja Electricity Distribution Company (IKEDC), the R3 group that charges N26.50 per unit will now pay N36.49 per unit, and later N58.

Meanwhile, Buhari has approved a one-year waiver of 35% import tax on prepaid meters to encourage greater provision for correct billing for consumers.

The approval was the outcome of Zainab Ahmed, finance minister ‘s request to quickly monitor the deployment of prepaid meters under meter asset providers (MAP) Nevertheless, as a consequence of the COVID-19 pandemic, it ordered the electricity distribution companies (DisCos) to postpone the planned tariff increase in March. In June, because of the pandemic on energy users, the national assembly had convinced the DisCos to delay the proposal until the first quarter of 2021. Senate President Ahmad Lawan had argued that customers should be metered adequately before the tariff hike was enforced. The new tariff regime is set to kick off on September 1 with the president’s approval, and be reviewed quarterly. That is said to be a prerequisite to support a planned $1.5 billion loan from the World Bank for the power sector.

“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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