By Caleb Jacob
The Manufacturers Association of Nigeria (MAN) has vowed not to pay the new electricity tariff recently announced by the federal government through the Nigerian Electricity Regulatory Commission NERC.
MAN members in Kano and Jigawa who are under the franchise of the Kano Electricity Distribution Company KEDCO said the new tariff has affected their cost of production despite the recovery of the naira against the dollar.
Grassroots Parrot had reported how NERC on April 2 approved the upward review of electricity tariffs allowing power distribution companies (DisCos) to raise electricity prices to N225 per kilowatt-hour from N68.
NERC’s Vice Chairman, Musiliu Oseni explained that the new tariff will only affect Band A customers and of course most of MAN members are under this category.
Commenting on the development on Wednesday, the Chairman of Kano and Jigawa branches of MAN, Muhammad Bello Isiaku alleged that the hike in price of electricity tariff did not comply with the guidelines set by the NERC.
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“Everyone in the manufacturing sector was shocked by this new increase in tariff and because of the effect that it has on our manufacturing cost, we are not going to accept it,” he said.
According to him, many company owners have written to the Kano Electricity Distribution Company (KEDCO) and NERC, notifying them of their resolve to stick to the old tariff.
“Most of the CEOs of all the manufacturing companies here in Kano had a meeting and we have decided to only pay the old tariff pending the review by NERC, KEDCO and all the Discos,” he added.
Isiaku stressed further that despite the recent appreciation of the naira, the sudden tariff hike will force many manufacturers to close down.
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“It’s only natural that when inflation goes down – give it a month or two – everything will reduce. But all of a sudden, this new electricity tariff will not let us reduce prices of our commodities despite the recent naira appreciation.
“It will reflect in the cost of our production this month and the coming month if urgent actions are not taken.” He said.
This came days after the Federal Government ordered the sale of KEDCO and other DisCos that had been taken over by banks and the Assets Management Corporation of Nigeria (AMCON) from their original investors/owners.
Currently, four DisCos including KEDCO are under the management of banks and AMCON.
The Abuja Electricity Distribution Company is under the management of the United Bank of Africa (UBA), while Fidelity Bank manages KEDCO, Kaduna Electricity Distribution Company, and Benin Electricity Distribution Company.
The Ibadan Electricity Distribution Company is under the AMCON management.