NERC Says Tariff Hike Mandatory Every June 1

Nigeria Electricity Regulatory Commission (NERC) has explained that the latest increase in tariff was not due to inflation rate but mandatory every June 1.

The commission said in a statement that, ” the inflation rate in the Multi-Year Tariff Order (MYTO) has not changed because inflation in Nigeria has remained single digit. NERC could not have increased tariffs due to rate of inflation which has remained stable.”

The statement noted that in 2012, NERC published the MYTO – a tariff plan that sets both wholesale and retail tariffs for the industry over a five year period.

This means that tariffs have already been set for every year starting 2012 through to 2016.

It added that the effective June 1 of every year, a new tariff is to take effect. NERC said this will continue till the five-year period of the MYTO has lapsed, after which there will be a major review.

The statement said, “NERC has not changed, or increased tariffs since 2012. Rather, it is the tariffs as published in the 2012 Multi-Year Tariff Order (MYTO) that have come into effect in June 1, 2013.

“In between the major reviews are bi-annual minor reviews that look out for significant changes in macroeconomic indicators such as interest rate, inflation and exchange rates. These minor reviews do not automatically translate to an increase in tariffs. In fact, if the conditions are right, minor reviews could lead to a decrease in tariffs, if not maintaining the status quo.

“So far, NERC has conducted two of such minor reviews, and the outcome of the review exercises have not led to any changes in the published multi-year tariff. The tariff remains the unchanged for now.”