* DISCOs lament how consumers are by-passing meters to steal electricity
WorldStage Newsonline– Residents of No. 32, Adebayo Street in Alakuko axis of Lagos State were near to physical fists throwing over unconfirmed circumstances of shorter span of enjoyment of electricity recharge.
The controversy arose from dragging but sudden surge in electricity tariff which, unknown to them, was the reason earlier fee for recharging their prepaid meter in a month no longer lasted that long.
At first, the landlady, Mrs. Titilayo Shotayo, had attributed the shortage to possibility of tenants having brought in additional electrical devices and thereby reduced the usual span of monthly recharge of meter. She suggested apartment-to-apartment check for such devices to know who among the tenants had caused the shortage. After heated arguments among the tenants in favour and against the landlady’s suggestion and which almost resulted to tenants abusing themselves, a move for calm and suggestion for check of order of previous payments by one of the tenants led to the discovery that Ikeja Electricity Distribution Company (IKEDC) had stealthily ramped up tariff per unit of electricity supply by close to 100% from the previous N45 per unit to N87 since September 2023.
Though the initial enmity generated among the tenants by the hidden increase subsided, but not the pain of the crushing burden of additional payment liability for same period of a month. The tenants could neither understand nor fathom how to afford a difference of N86, 000 in the previous monthly recharge of N34, 000 and the new N120, 000. By implication, a room tenant previously paying N2, 675 per month will now be paying about N9, 500 while a flat apartment tenant paying N8, 000 will have his bill jumped to about N28, 000 per month. The dramatic aspect of it is that tenants, by the tariff increase, are now paying more for electricity than rent.
Bad as the situation is, the landlady is already warming up to worsen it by jerking up the rent, because according to her, it’s inconceivable for electricity charges to be higher than rent. That’s another trouble the tenants of the facility are up with. And truly, the landlady may be right with her readiness to hike rent because right from the coming of electricity, charges for its use has ever neither be at par nor anywhere near rent. That leaves tenants at the receiving end of both financial tragedies.
The situation at No. 32 Adebayo residence was later to expose similar happenings in many other residential facilities around the area as their tenants, aware of what happened at No. 32, told their own stories too in solidarity. One of them who simply identified himself as Famoroti narrated that himself and other tenants in his house are already contemplating protest against their landlord because, according to him, if house rent increment is effected he might not be able to take care of even the most basic responsibility at home front.
He complained he’s already down meeting promptly the usual financial responsibilities as children’s school fees, house rent, transportation as well as liability to some extended family members’ needs. He said additional increase of rent would mean a death knell for him. While he did not give by what percentage the landlord is like to jerk up the rent, he said consequence on his finances is the same anyway.
A check by WorldStage Newsonline with IKEDC officials at Alakuko and Ijaiye Lagos office of the company for explanation on why it smuggled in the hike in tariff showed it was done in effecting previous alert by the company on the inevitability of the action due to fuel subsidy removal. Few of the officials who reluctantly volunteered to speak, but under anonymity, cited the spiraling exchange rate of naira to dollar as well as fuel pump price increase as reasons.
Residents of No. 32 Adebayo Street and other consumers of electricity appear not alone in conflict the tariff hike is generating as officials of DisCos disclosed that they’re equally having a hell of task reining in on alleged meter tampering by some consumers of their services as a way of lessening the effect of the burdensome tariff.
One of the officials disclosed what, according to him, had become the practice of electricity consumers to disconnect electric wire from prepaid meter and connect it directly to electricity source at weekends, mostly to evade meter reading of power consumed. He lamented that not even the heavy punishments or legal/monetary fines sometimes imposed on violators had helped to discourage the development.
Asked if the burdensome new tariffs are not unbearable enough to justify the practice, though illegal and criminal, he said the new tariffs were necessary if DisCos was to continue in business and Nigerians to have adequate supply of electricity. He admitted the negative financial impact of the tariff increase on the lives of consumers but denounced that the problem emanated from them. He argued that the company was operating based on the basic principle cost and pricing marketing practice, adding that the country cannot eat her cake and have it with the liberalization policies that the current administration is giving force.
Since the start of the year there have been reports and counter reports of Nigeria’s Electricity Distributing Company (DisCos) intention of increasing charges on per unit electricity consumption, leaving Nigerians seriously worried about the potential impact it’s going to be on their lives. Confirming the reports which many had regarded as rumours, DisCos declared in June it was going to jerk up tariff by 40% beginning from last July and justified the hike as a response to the floating of the naira. It added that by the increase it aimed to ensure that the electricity industry remained financially viable and sustainable in the face of forex challenges.
DisCos also explained that “Under the Multi-Year Tariff Order (MYTO) 2022 guidelines, the previously set exchange rate of N441/1 dollar may now be revised to approximately N750/1 dollar, impacting the tariffs associated with your electricity consumption. For customers within bands B and C, with supply hours ranging from 12 to 16 per day, the new base tariff is expected to be N100 per kWh while Bands A with (20 hours and above) and B (16 to 20 hours) will experience comparatively higher tariffs. For customers with a prepaid meter, we encourage you to consider purchasing bulk energy units before the end of this month as this will allow you to take advantage of the current rates and potentially make savings before the new tariffs come into effect. For those on post-paid (estimated) billing, a significant increment is imminent in your monthly billing, starting from August.”
While that explanation was given at a time the exchange rate was being speculated to peak at N750/1$ from N441/1$, it’s little wonder that DisCos resorted to smuggling in further tariff increase for fear of popular revolt should it make it a duty to the public to announce.
The MYTO 2022 guideline is a framework that the Nigerian Electricity Regulatory Commission (NERC) uses to determine electricity tariffs in Nigeria. Its guidelines provide a structured approach to calculating and reviewing tariffs to ensure transparency, cost recovery, and sustainability in the power sector.
It provides a 15-year tariff path for the Nigerian electricity industry and undergoes regular reviews to account for changes in factors such as inflation, U.S. dollar exchange rate to naira, gas price and generation capacity.
Major reviews are conducted every five years, during which all inputs are reviewed in consultation with stakeholders, while the minor reviews are done bi-annually, which involve collecting actual data from the National Bureau of Statistics, Central Bank of Nigeria and System Operations Unit of Transmission Company of Nigeria.
It then comes to the question of the propriety of rent increase because of increase in electricity tariff. Does increase in electricity tariff have any direct economic bearing on rented houses to warrant consequential increase adjustment to existing rent rate?
Dr. Felix Fagbade of Solid Security & Investment Ltd, a stock broking company, said there is. According to him, as long as the current economic crisis in the country is felt by house owners and value of rents they usually collect is considered significantly compromised such that they no longer cover for same range of expenses they previously did, then house owners would not be acting in error to jerk up rents.
Asked if such move will not amount to double burdens on tenants since there is yet no proportional adjustment to their earnings, Fagbade replied that’s the reason tenants who were government employees should pressure their employers to equally jerk up their pays. He said those (tenants) that were self-employed must have already reflected the difference in their charges on services they rendered or on prices of products they sold. He admitted however that it would only amount to wickedness if government, in the face of the hardship its new economic policies had brought, refused to mitigate the effect by increasing employees’ earnings for them to be able to meet up with financial responsibilities.
Mr. Patrick Umeheze, a public analyst who also spoke on the development explained that the country is presently at a fix but needed the various reforms being emplaced by the current federal administration. He argued that while the citizens needed to accept and cope with the temporary pains the reforms bore, he however maintained that the pains shouldn’t be allowed to be borne by a class of the citizenry while other class or classed were insulated. He also condemned some of the nation’s utilities’ operators like DisCos, telecom companies etc as taking unfair advantage of the current economic crisis to act Shylock. Much as he acknowledged that the crisis had caused rise in costs for individuals and organizations alike, he disagreed with some of the actions being taking by many companies or entities to weather the effects.
Earlier in the year the Nigeria Labour Congress (NLC) had warned against the planned increase, stating that the massive rise will not bode well for Nigerians. In the warning, NLC dismissed the figures churned out by DisCos as enough justification for what it described as reckless proposed tariff increase. “The issue of capacity to pay and quality of service delivery is not only germane but superior to any rationalization by market logic,” the Congress President, Joe Ajaero, had said while giving the warning.
Also, the president of the Manufacturers Association of Nigeria, Francis Meshioye, in an interview with Arise TV, sought the reduction of electricity tariffs for manufacturing businesses.
Also discouraging the proposed tariff increase, the president of the Manufacturers Association of Nigeria, Francis Meshioye, had said “no increment on the tariff currently, rather the government should look at a way to give us special tariff on electricity to be able to mitigate overburdened expenses of expenditure of manufacturing industry in the country.” According to him, the association currently spends up to 30 per cent on energy, and he urges a subsidy of up to 20-15 per cent to help competitiveness.
Shehu Sanni, a social critic and former senator, also called the proposal soulless. “Some Power distribution companies have issued a notice of an impending electricity tariff hike; that is soulless. No reasonable person will support such a policy. Yes, we have wealthy people, but we are still a developing country,” he had called out at the time.
Sanni also faulted the federal government on its move to take off fuel subsidy, make plans to increase electricity tariffs and then hike 40 per cent in vehicle duties. “They’re simply being unfair to Nigerians,” he bemoaned on Twitter, now X.
