Manufacturers seek further reduction in electricity tariff

In view of the high energy spend that impacts negatively on their margins, manufacturers in the country are asking the Nigerian Electricity Regulatory Commission (NERC) to further reduce electricity tariffs and revert to the Multi-Year Tariff Order (MYTO 2.0) from MYTO 2.1.

NERC had recently reduced the electricity tariff by 50 percent following pressure and complaints from manufacturers and other consumers.

But local manufacturers say they are not yet satisfied with the tariff as this will still cripple their chances of contributing meaningfully to the Gross Domestic Product (GDP) and creating sufficient jobs.

“We are not yet happy with that,” said Frank S. Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN), in an interview with Real Sector Watch.

“We are asking the NERC to revert to MYTO 2.0, which started in 2012, and is still subsisting till 2017 as it has a five-year order,” Jacobs said, at a workshop on ‘Power Demand and Energy Consumption in the Industrial Sector in Nigeria’ held in Lagos.

“MYTO specifies that in making changes, you must carry consumers along. You have to hold public sessions where you have to interact with consumers and agree on a position. Even though some discos claimed they did, as far as we are concerned, they never did,” he said.

According to him, MAN’s presentation led to the 50 percent reduction, but the body of manufacturers is still engaging the NERC to revert completely to the old order whose tariff is far cheaper.

“We are happy they have responded but that response is inadequate,” he said, saying renewable energy was the way to go as manufacturers were looking towards tapping into any new technology that tend to support it.

On the essence of the workshop on power demand and energy consumption in the industrial sector, the MAN helmsman said the event had enabled manufacturers to know how much energy they consume and how to manage and utilise energy.

The workshop is timely at this point when industries and the nation are grappling with inadequate power supply and sustenance of power infrastructure, he said, stressing that stakeholders should take power demand and supply seriously to avoid further factory closures, massive job losses, accentuation of youth unemployment and escalation of the already insecurity problem.

Charles Diarra, head of energy efficient unit, Nigerian Energy Support Programme (NESP), said Nigeria was endowed with large fossil and renewable energy, but utilisation of same for the benefit of a sustainable development and energy generation to the holistic development of the country was still limited.

“There is hence an opportunity to moderate use, increase industrial sustainability, improve competitiveness and add more value to the product through a reduced energy intensity in the industrial sector,” Diarra said.

ODINAKA ANUDU