Senate Blocks Electricity Tariff Hike Amid Economic Strain

Legislators Demand Focus on Generation, Distribution Over Increases

by Oluwatosin Racheal Alabi

In a decisive move, the Nigerian Senate has taken a firm stand against the proposed increase in electricity tariffs, amidst the ongoing economic challenges that have intensified following the removal of fuel subsidies. The upper legislative chamber, advocating for the citizens’ plight, declared the proposed hike as ill-timed and called for its immediate cessation. This resolution emerged during a session in Abuja, chaired by Senator Fred Itua, where the Senate emphasized the critical need for the Federal Government to prioritize the enhancement of electricity generation and distribution over tariff increases.

During this session, the Senate also announced plans to delve into an investigative inquiry regarding the substantial sum of over N2 trillion, as mentioned by the Minister of Power, Bayo Adelabu. This fund is purportedly required to stabilize electricity tariffs and avoid a recurrence of the contentious fuel subsidy debacle. Furthermore, the Senate has tasked its Committee on Power to conduct a thorough examination of the operations of Distribution Companies (DISCOs), focusing on metering status, compliance with legal and regulatory frameworks, and overall service delivery. This initiative aims to ensure transparency and accountability within the power sector, particularly concerning the metering of electricity consumers and the post-privatization operational requirements for DISCOs.

The motion leading to these resolutions, titled “Planned Increase in Electricity Tariff and Arbitrary Billing of Unmetered Customers by Distribution Companies (DISCOs),” was championed by Senator Aminu Iya Abbas and co-sponsored by 10 other senators. Senator Abbas articulated the widespread concern over the proposed tariff increase, highlighting its potential exacerbation of economic hardships. He referenced the Minister of Power’s statements regarding the financial indebtedness to Generating Companies (GenCos) and gas companies, which underscore the urgent need for a sustainable solution to the subsidy dilemma without resorting to tariff hikes.

This sentiment was echoed by several senators, including Orji Uzor Kalu, who pointed out the necessity of government intervention in electricity subsidies, as is the practice in advanced economies. The focus, they argue, should shift towards improving the transmission and distribution segments of the power sector to ensure that citizens are not charged for unused services.

Senate President Godswill Akpabio and Senator Aminu Tambuwal voiced their concerns, emphasizing the inopportuneness of increasing electricity tariffs at a time when Nigerians are already struggling with the repercussions of fuel subsidy removal. They highlighted the dire need for the government to reconsider its approach, particularly in light of the adverse effects on small and medium enterprises (SMEs) and the broader economy.

The Senate’s resolutions reflect a broader consensus on the need to address the foundational issues plaguing Nigeria’s power sector. By halting the proposed tariff hike and initiating a comprehensive investigation into the financial and operational aspects of the DISCOs, the Senate is advocating for a more equitable and sustainable energy policy. This policy shift is expected to not only alleviate the immediate economic pressures on Nigerian households and businesses but also lay the groundwork for a more robust and efficient power sector that can drive national development in the long term.

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