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Opposition to Electricity Tariff Hike by Manufacturers and Labour, Insistence on Subsidy

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In reaction to the recent increase in electricity tariffs approved by the Federal Government, Manufacturers and Organised Labour have come out in strong opposition.

The administration led by Bola Tinubu has given the green light to a 240 percent hike in tariffs for those enjoying a 20-hour power supply.

Despite this decision, manufacturers and Labour are standing firm on their demand for electricity subsidies to remain in place, as they fear that the removal of subsidies could drive manufacturers out of business and escalate inflation rates.

The subsidy on electricity has been completely removed from the tariff paid by consumers falling under the Band A category, constituting approximately 15 percent of all power users nationwide.

At a press briefing in Abuja on Wednesday, the government announced the increase in electricity tariffs through NERC, stating that affected users in this category will now be charged N225 per kilowatt-hour, a significant jump from the previous rate of N68/kWh, translating to a 240 percent surge. The new tariff structure came into effect yesterday.

The organized private sector, Nigeria Labour Congress, and the Trade Union Congress have all expressed their dissatisfaction with the heightened tariffs, regardless of the user category. They argued that the tariff hike could force manufacturers out of operation, intensify inflation, and suppress small and medium enterprises, emphasizing that very few locations in Nigeria receive up to 20 hours of electricity supply daily.

Band A users are those who previously received up to 20 hours of electricity supply daily and paid around N68/kWh before this latest government directive via NERC.

Musiliu Oseni, the Vice Chairman of NERC, mentioned to reporters in Abuja that the government cannot sustain the electricity subsidy and had to explore avenues to reduce the projected N2.9 trillion spending on power subsidies for this year.

He further noted that Band A customers make up 15 percent of the total 12.82 million registered electricity consumers in the country, disclosing that the commission has also reclassified some customers within this band.

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