Labour Pushes For 40% Reduction In Electricity Tariffs
There is a stalemate in the push for electricity tariffs reversal championed by Organised Labour.
Labour is pushing for a 40 per cent reduction following September’s increase by the Federal Government.
Labour’s argument is based on findings that gas, a major component of the Distribution Companies (Discos), should not be sold in dollars.
According to Organised Labour, the product should be sold to Discos at $1.50, as against $2.50, even if it is to be sold in foreign currency.
Organised Labour found that the Discos consume 70 per cent of the gas generated in the country, wondering why the government has to always increase tariff.
A source close to the seven-man committee set up by the Federal Government faulted the continuous sale of gas to Discos in dollars.
After an increase in electricity tariff in September last year, President of the Nigeria Labour Congress (NLC), Ayubba Wabba and that of the Trade Union Congress, Quadri Olaleye, threatened to embark on strike.
After several hours of horse-trading, the proposed strike was suspended, with Labour and the Federal Government agreeing to set up a committee to review the increase.
The committee submitted an interim report, which recommended a temporary suspension of the tariff.
In January, the Nigerian Electricity Regulatory Commission (NERC) issued an order to DisCos – signalling an increase in electricity tariff, but the move was suspended.
However, a source close to the committee, who pleaded anonymity, said NERC has not stopped in its plans to push for an increase in tariff.
The source, who is a Labour chieftain, accused the regulator of being in bed with both the DisCos and Generating Companies in the push for an increase in electricity tariff.
The source said: “These guys are unanimous in the increase in tariff. NERC is supporting them (Discos and Gencos) but we are after NERC because the indices for the review are actually faulty and you can’t get a perfect tariff review based on a faulty premium.
“By the time you dollarise gas, you are giving them (discos and gencos) gas at one dollar fifty cents and then electricity that consumes 70 per cent of gas generated in the country, instead of theirs to be down, they are giving them at two dollars fifty cents. That is what we discovered.
“Even if you are to insist on giving it in dollars; which is wrong since our currency is naira, it should be brought down to industry standard – which is one dollar fifty cents. We are taking one dollar from it and that will constitute over 40 per cent reduction in tariff.
“Even at that, for using 70 per cent (of the gas produced in the country), theirs should be lower because they consume the bulk of the gas we produce.”
The source added: “Our position is that tariff should reduce. Labour is insisting on a minimum of one dollar fifty cents for gas; that is what we are selling to other gas users in the country.
“Labour presented a minimum of one dollar fifty cents to the Federal Government team from our findings. If you do that you will have a further reduction of electricity by over 40 per cent.
“We equally insisted that inflation and foreign exchange should be reviewed. Because if you don’t do that, all these things will change next month; there will be inflation next month (February) because they would want to equally increase.”
Minister of State for Labour and Employment, Festus Keyamo, who is the Chairman of the committee, said the committee was still working and its outcome will be made public when it is ready.