Businesses Threaten Shut Down over High Electricity Tariff

Industry owners and employers of labour on Wednesday declared that they would be forced to shut down their operations if the Nigerian Electricity Regulatory Commission (NERC) continues to insist that the recent increase electricity tariff holds.

The factory owners told NERC at a consumer forum organized by the commission in Abuja, that the new tariff contained in the Multi-Year Tariff Order (MYTO 2.1) which came to effect on New Year’s Day was not acceptable to them.

They said energy charge for factories and businesses is the highest in the world and makes the running of business in the country unsustainable.

Speaking at the forum, Felix Okojie, Ikeja Branch coordinator of Steel Manufacturers Group, Manufacturers Association of Nigeria, said NERC must revert to the old MYTO which took effect from June 2012 and had a life span of five years.

Okojie noted that NERC decision to jack up fixed charge from N750 to N198, 447 for factories supplied by Ikeja Disco was an attempt to destroy the manufacturing sector and throw people out of work.

Also speaking, Sunil Goel, chairman of the MAN Steel Manufacturing Group, tasked NERC to go back to the old MYTO which was initially scheduled to run till 2017.

Goel, said: “As steel manufacturers and other consumers on tariff D3 are DISCOs most prominent consumers/customers, and electricity being the most critical input to our production process, we want to reiterate the following obvious facts and the impacts of the new hike on electricity tariff on our production and its adverse effects on our planned long term projections which were actually based on MYTO 2012-2017 tariff order.

They both recalled how the sector was crucial to national development, especially considering its potential for employment generation, revenue generation, and contribution to national GDP.

They also warned of looming job losses and accused NERC of giving preferential lower rates to some firms

Okojie particularly explained that a comparative analysis of the cost of energy in Nigeria against order countries around the world showed that Nigerian business pay the highest in the world.

He said: “The MYTO 2012 to 2017 which was supposed to operate for five years constituted our long term planning. So, coming at the middle to increase and not just a mere increase but an increase of almost 44-45 percent is completely destructive. In some areas, it is 100 percent.

“It is like nobody is actually thinking about the progress of industries in the country. You do not just wake up from nowhere and begin to disrupt a long term plan. In the MYTO, it was not mentioned that the five year plan, which started on the 1st of June 2012 was going to be distorted at any time.

“The explanation that they have the right to adjust it any time is completely new to us. Maybe, that is internal administrative thing but even if they would have that, since we are the major stakeholders, they should carry us along.”