July ends. 😮💨
At the end of the day, there was no increase in Electricity tariffs!
So, what were all those statements in June about tariff increases? Were they just empty threats or weighty jokes?
We signed off the last Data Dive in June on that cliffhanger.
We concluded our dispassionate analysis of the DisCos’ business template over the years with a doubt-full prayer: “I hope you pay more for electricity only because your Electricity DisCo supplied you with more. We’ll know by next week Saturday.”
The next Saturday, July 1, everything stayed the same.
Feeling the pulse of the people before that D-day, The Guardian lamented: “Households under pressure as new electricity tariff due July 1.” That was last month, June 19.
Feelers in the mainstream media in June were that Nigerians should brace up for an increase in electricity tariffs beginning July 1st.
Arise TV also mentioned that the DisCos have alerted their customers of a 40 per cent tariff hike by July 1.
Then, many began the panic purchase of electricity units to save some bucks before the deadline given by the Discos.
And all of that spending for nothing.
What happened?
Imprudence
The story begins with a semblance of the Discos’ lack of caution in ordering their practical affairs. No thanks to the Broken Window Theory.
This copycat crime model came to play in the DisCos’ reported threats to increase the electricity tariffs of helpless Nigerians held under their monopolistic jaws.
In this, they did not defer at all to the Nigerian Electricity Regulation Commission (NERC) whose purview it is to intervene in matters such as this.
Instead, they purportedly took a cue from their monopolistic pair in the oil sector, the NNPC Limited.
Seeing how easy it was for the NNPC to take away dawn in Nigeria and replace same with dusk with no consequence, the Electricity Discos too presumed they could shove helpless Nigerians who are hoping for the morning light into a darker night.
They took the law into their invisible hands just as the NNPC Limited did, after President Tinubu announced that the fuel subsidy was gone.
NNPC Limited, the monopolistic giant in Nigeria’s oil sector had raised the retail price of petrol from N194 per litre to N540 per litre, a 178% increase, without any consequence (so they further increased it to N617 per litre within 2 months, a 218% increase from the initial N194 per litre).
Learning that Nigerians’ docility could be taken for granted, several of the DisCos announced a tariff hike which would take effect from July 1, 2023, citing a MYTO guideline and exigencies of the times as the basis for their judicial ruling.
“Under the MYTO 2022 guidelines, the previously set exchange rate of N441/$1 may now be revised to approximately N750/$1 which will have an impact on the tariffs associated with your electricity consumption.”
“For customers within band 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, read a statement from Abuja Electricity Distribution Company (AEDC), cited by Daily Trust.
The AEDC further issued an advisory to all Nigerians stuck under its monopoly in Niger, the FCT, Kogi, and Nassarawa states thus:
“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 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.”
Going by this statement, all the 5.13 million prepaid customers are instructed to go berserk in the panic purchase of electricity credits while the 5.93 million unmetered customers on estimated bills should quietly await the uncertain fate of a higher tariff meted out without measure.
The Ikeja Disco reiterated the same advisory:
“Bands A (20 hours and above) & B (16 – 20 hours) will be much higher. If you have a prepaid meter, buying bulk energy units for your home or office before the end of the month may help you make some savings before you have to buy at the new rate.
“For those on post-paid (estimated) billing, a significant increment is imminent in your monthly billing, starting from August. Please take note. Electricity units are set to jump by 30-40% in just over a week. You are best advised to buy as many units as you can before July 1.”
In Eko DisCo’s love letter to its customers, the company wrote:
“Dear Customers, electricity tariffs are set to go higher on July 1st due to the floating exchange rate. MYTO 2022 set the exchange rate at N441/$1, which may now be adjusted to about N750/$1.
“We may be looking at a base tariff of N100 per kWh for Band C (12 – 16 supply hours per day). Bands A (20 hours and above) & B (16 – 20 hours) will be much higher.
“If you have a prepaid meter, buying bulk energy units for your home or office before the end of the month may help you make some savings before you have to buy at the new rate.
“For those on post-paid (estimated) billing, a significant increment is imminent in your monthly billing, starting from August.”
What a show of love and concern these DisCos have for their customers.
And what a show of indifference to the customers these DisCos sell energy to without a meter.
Just think of driving into a fuel station to refuel your car, and being charged whatever amount the petrol attendant deems fit.
What filling station installs fuel dispensers without meters?
Welcome to the world of Nigeria’s Electricity Distribution Companies.
However, Premium Times reported that the Abuja DisCo has dissociated itself from the statements on the increase of electricity tariffs. The rest did not affirm or dispute the statements.
Prudence
It was strange to see the DisCos were the ones announcing deadlines for current tariffs and determining the price for an upward review.
Is that not the function of the Nigerian Electricity Regulation Commission (NERC)?
It was suspicious too that the three DisCos who purportedly issued a statement to that effect asked their customers to buy more power credits before the D-day they set.
However, the DisCos seems to have (finally) deferred to the NERC’s jurisdiction on the review of the tariff.