HomeNewsLabour Versus Govt Showdown Looms On New Electricity Tariff Hike

Labour Versus Govt Showdown Looms On New Electricity Tariff Hike

The Federal Government dug in its heels on Friday, refusing to back down from the controversial 240percent tariff increase for Band A electricity consumers despite widespread opposition.

This move throws has made the Nigeria Labour Congress (NLC) to tell the Federal Government to prepare for the consequences of the tariff hike.

Benson Upah, Head of Information for the NLC, accused the government of prioritizing the dictates of the World Bank and IMF over the welfare of Nigerians.

He warned of “consequences” for this “unpopular” policy.

He hinted at a potential labour unrest.

Upah said: “We did say earlier that this tariff hike is insensitive and unpopular. So if the government elects to continue with the hike or persists in something that is evil, I’m sure it is equally prepared for the consequences of that evil.

“The manufacturers are saying this is going to hurt businesses and make the environment more hostile, and we also said so. There is no place in the world where high power tariffs have supported manufacturing. Not even in the developed world.

“So, it completely beats our imagination for the minister to have the audacity to say that the policy would continue. What this means is that the minister and the President are not in charge. It is saddening that the minister elected to pursue an unpopular policy.”

“It shows that the minister and the President are not in charge. The people in charge are the World Bank and the IMF. They are the ones driving this highly injurious policy.

“So, our leaders should be prepared for the consequences of this highly injurious policy. That is what I’ll say about this issue for now.”

Manufacturers echoed these concerns, fearing the hike would cripple businesses and exacerbate inflation. They pointed out that high electricity tariffs have historically hampered, not helped, manufacturing growth, even in developed nations.

The new policy scraps electricity subsidies for Band A customers, a group representing roughly 15percent of the national grid and identified as receiving up to 20 hours of daily power supply. Previously, these consumers paid N68 per kilowatt-hour (kWh). Under the new regime, that price skyrockets to N225 per kWh.

Justifying the hike, Power Minister Adebayo Adelabu emphasized the crippling cost of subsidizing electricity. He revealed that the government was shouldering a staggering 67percent of power generation, transmission, and distribution expenses – translating to an estimated N2.9 trillion in 2024, exceeding 10percent of the national budget.

Adelabu argued that such a significant resource allocation towards a single sector was untenable, especially with other vital areas like education and healthcare competing for funds. He framed the tariff increase as a necessary evil, freeing up N1.4 trillion for investment in these neglected sectors.

The Minister attempted to soften the blow by emphasizing the temporary nature of the subsidy removal for Band A customers. He outlined a three-year plan to phase out electricity subsidies entirely, with Band A serving as a “pilot phase” for this transition towards a cost-reflective tariff system.

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