The Abuja Electricity Distribution Company (AEDC) has clarified that it has not raised electricity tariffs, contrary to media reports.
Reports surfaced on some media platforms that AEDC had announced an impending tariff increase despite not being approved by the regulator, NERC. A viral message on WhatsApp and social media also suggested the company has announced a tariff change.
This announcement also comes amidst predictions from energy experts that electricity tariffs are expected to increase due to the managed float by the Central Bank of Nigeria (CBN) and the austerity measures implemented by the administration of President Bola Tinubu.
The AEDC emphasized that no approval has been granted for tariff increments and urged customers to disregard any notifications suggesting otherwise.
Major changes are not due til December
In a recent report by Mediangr, it was revealed that electricity prices in Nigeria are anticipated to rise following the unification of the naira, which has led to its depreciation at the investor and exporter window. The CBN recently announced the consolidation of all segments of Nigeria’s foreign exchange market into one.
Dr. Damilola Oluwole, a Director of Energy Markets and Rates Consultants, explained that current electricity tariffs have already factored in the inflation rate.
The inflation rates used are based on historical average rates from the National Bureau of Statistics (NBS), with the current figure standing at approximately 22.4%. Consequently, due to a slight increase in the Consumer Price Index (CPI), the impact of tariffs is expected to be minimal.
Dr. Oluwole further mentioned that according to figures provided by the CBN’s website, the exchange rate of USD/NGN 467.53 indicates a marginal increase compared to the current rate of USD/NGN 441.48.
He added, “If we assume that the rate of USD/NGN 663 from the I&E window on Friday, June 16th, is used for December 2023 tariffs, and all other factors remain constant, we can expect an average increase of about 25-30% for some distribution companies (DisCos).”
In the meantime, the Nigeria Labour Congress (NLC) has demanded that the Federal Government halt the proposed 40% increase in electricity tariffs, scheduled for July 1, 2023.
The NLC deems the tariff hike to be insensitive and callous, expressing concerns about its impact on consumers, particularly those who are financially disadvantaged.
The NLC also raises concerns about inadequate service delivery, covert tariff increases, and the potential hardships faced by ordinary Nigerians as other entities adjust their prices or rates.