- ‘It closes market gap of N575bn’
- NERC kicks against Consumer Protection Commission
Federal government yesterday declared that the 45 percent hike in electricity tariff made by the Nigeria Electricity Regulatory Commission, NERC, in January this year, was irreversible, explaining that doing so would create market gap of N557billion.
Minister of Power, Works and Housing, Mr. Babatunde Fashola, and the acting chairman/chief executive of NERC, Dr. Anthony Akah made the declaration to the Senate joint Committee on Labour and Productivity, and Power, Steel Development and Metallurgy during a public hearing session on the electricity tariff hike.
This is as, Nigeria Electricity Regulatory Commission, NERC, in another development in the House of Representatives, kicked against the proposal for an act to establish the Consumer Protection Commission and Tribunal yesterday.
The Senate had in February following a motion moved to that effect by its chairman, Committee on Labour and Productivity, Senator Suleiman Nazif (APC Bauchi North), ordered the reversal of electricity tariff hike as well as a public hearing for all the stakeholders in the sector over the unpopular decision.
Akah, while explaining reason for the NERC’s refusal to obey the directive, told the joint committee that obeying such directive would have created series of avoidable setbacks in the sector like a market gap of about N575billion, which would have compounded the initial market gap of N187billion the takeoff tariff slammed on investors.
Besides, he said six electricity generating companies had before the Senate’s resolution taken NERC to court over the tariff hike and that they could not do final order on reversal of tariff since the process that led to it was in compliance with Section 76, sub-Section 8 of the Act guiding the operations of the commission.
Speaking in the same vein, Fashola said the sector needed the market reflective tariff to survive, stressing that basket of indices led to the hike like borrowing rate for the investors, exchange rate, availability and cost of gas, etc.
He said: “One of the reasons why the tariff has gone up was that a major component, a significant number of our power plant depends on gas out of about 26 power plants that we have only about three are hydro.
“We were heavily dependent on gas, people were exporting gas because gas was selling outside the country at $4 and it was selling for domestic use at $1. 30, government review that price to $3 .30 and it is the primary component for manufacturing. Power has come up; it should make sense, unless government decides to subsidise it.”
According to the minister, even with the recent hike in electricity tariff, Nigeria still ranks among countries with low tariffs in Africa and by extension the world.
He noted that since 2005 when power privatisation process started till 2013 when the major generating companies and distribution companies were handed over to investors, every segment of government was involved and if there is any failure now, it should be for all and not a particular group.
Fashola argued: “Enabling laws for the process were passed by the National Assembly in 2005; process completed by the executive in 2013. If the process was bad, where was oversight?”
He, however, pleaded with the lawmakers and Nigerians to be more patient with government and investors on the process, as three years is not enough to judge its success or failure.
But the chairmen of the joint committees, Senator Nazif, Senator James Manager, along with their members, insisted that the tariff as it is now without commensurate power supply for Nigerians is unacceptable.
The submission that was supported by the representatives of the Trade Union Congress, TUC, Engr. Okonkwo, and National Union of Electricity Employees, NUEE, Comrade Joe Ajaero who both blamed the government for inadequate consultations on issues affecting the power sector.
NERC kicks against establishment of consumer protection commission
Nigeria Electricity Regulatory Commission, NERC, yesterday kicked against the proposal for an act to establish the Consumer Protection Commission and Tribunal.
The body argued that the proposed commission would lead to duplication of functions of government agencies.
Our correspondent learnt that the proposed commission seeks to impose stiff penalties on government agencies and corporate entities that infringe on the rights of consumers of goods and services in Nigeria.
NERC took this position at a public hearing on a ‘Bill to Repeal the Consumers Protection Act Cap 25 LFN 2004, establish the Federal Competition and Consumer Protection Commission and Consumer Protection Tribunal for Development and Promotion of Fair, Efficient and Competitive Markets in Nigerian Economy.’
The bill also aims to facilitate access by all citizens to safe products, secure the right of consumers in Nigeria and for other related matters.
While declaring the event open, speaker of the House of Representatives, Hon. Yakubu Dogara hinted that the major trust of the bill was to establish a commission to regulate competitive activities in every sector of the Nigerian economy.
Represented by the deputy whip of the House, Hon. Pally Iriase, the speaker said the need to ensure fairness in the nation’s economic activities had always been part of Nigeria’s economic goals.
Chairman of the House Committee on Commerce, Hon. Sylvester Ogbaga said that the proposed commission sought to create a level playing field for all businesses and promote the ease of doing business in Nigeria.
Director of Consumers Affairs at NERC, Mrs Dupe Adelaja said the proposed commission was going to create confusion in the regulated industries and sectors of the economy.
She told the committee that the proposed commission was in conflict with PPSR Act, adding that Sections 2 and 105 of the bill would not do well for the regulated industries.