The government was forced to suspend the implementation of the new electricity tariff regime in September, following a threat of industrial unrest by the Nigeria Labour Congress (NLC), its affiliates and allies.
However, the federal government and organised labour have resolved that the tariffs for certain categories of power consumers should be reviewed downward.
While the tariffs for customers in A and B bands were reduced by 10 per cent, the tariff for C band customers was reduced by 30 per cent.
For customers in the D and E bands, their tariffs remain frozen, which implies that there is no increment.
The Special Adviser on Infrastructure to President Muhammadu Buhari, Mr Ahmad Zakari, who confirmed this yesterday during the 51st virtual Power Dialogue organised by Nigeria Electricity Hub in Abuja, noted that since labour has accepted the new terms, the implementation will begin next week.
Zakari said the electricity market in the country will collapse if the government allows it to continue the way it has always been run, adding that the intention of the government is to transit to a market-based regime, where the demand and supply will determine prices.
According to him, after negotiations with organised labour, all the parties agreed to a reduction of tariffs for certain bands while bands D and E remain frozen and C will continue to be subsidised in the short term to the tune of 30 per cent.
He added that there will henceforth be more transparency in the collection of electricity revenues by the Distribution Companies (Discos) since it is now being closely monitored by the government.
He added that Value Added Tax (VAT) and other deductions will now be removed from the funds before the rest will be remitted to the Discos.
“Remember that 55 per cent of on-grid consumers are still 100 per cent subsidised. The N31 on average per kilowatt per hours for band D and E were paying before SBT, they will continue to pay. Only 45 per cent of the on-grid population was affected. And with the agreement with labour, we are now going on to take out an additional 30 per cent from band C in terms of what they were supposed to pay.
“That increase will be reduced by 30 per cent and then there will be a 10 per cent reduction in A and B. But I promise you next week on the headlines if we resume service based tariff, what everyone will be saying is that government has increased tariff for everybody and that’s because there’s a vibrant urban population that consumes the headlines. But we are committed to doing the right thing.
“Hard decisions are not always popular. But we are going back to SBT with the reduction agreement that we have with labour and we are going to make this market work,” he stated.