As the July 1 deadline for the new electricity tariff regime approaches, many Nigerians have been engaging in panic buying of electricity units to avoid potential financial strain when the new regime takes effect. Reports indicate that consumers are concerned about a possible 40 percent tariff hike, although there has been no official confirmation from the Nigerian Electricity Regulatory Commission (NERC), the regulatory body in the power sector…….Continue Reading
Under the previous administration of President Muhammadu Buhari, subsidies on electricity tariffs were removed, and a policy of reviewing tariffs every six months was implemented. The current Chairman of NERC, Engr. Sanusi Garba, has acknowledged the reduction of electricity subsidy over the past few years due to concerns about the sustainability of investors’ returns on investments.
The tariff increment is part of the minor tariff order review (MYTO) process, and previous increases have been implemented in January 2021 (50 percent), January 2022, and January 2023 (18.5 percent).
In anticipation of the potential hardship caused by the new tariff regime, some Nigerians with prepaid meters have begun recharging double their usual monthly amounts. This strategy aims to mitigate the initial impact of the tariff hike. Consumers like John Mark have agreed with other tenants in their compound to collectively purchase electricity units worth N30,000 before July 1, instead of their usual monthly purchase of N20,000.
Another consumer, Mr. Mustapha Ishaku, claims that the Abuja Electricity Distribution Company (AEDC) has already begun implementing the new tariff regime in secret. To prepare for the changes, he plans to recharge his meters twice the usual amount by the end of the month.
The panic buying of electricity units reflects the concerns and uncertainties among Nigerians regarding the potential financial implications of the new tariff regime. By stocking up on electricity units before the deadline, consumers hope to alleviate the immediate impact on their household budgets. However, the final decision on the tariff hike and its extent remains to be officially announced by the regulatory authorities.
