Nigeria: Fuel, Electricity Hike As Antithesis to Nigeria's SDGs

Fuel pump.
7 September 2020

Chiemelie Ezeobi, Rebecca Ejifoma, Ayodeji Ake, Sunday Ehigiator and Chiamaka Ozulumba, who sampled the opinion of some Nigerians, write that the double whammy increase in fuel price and electricity tariff forebodes ill for the standard of living and in essence, Nigeria's Sustainable Development Goals 2030 target

For most Nigerians, the coinage "September to Remember" is an annual ritual that transcends the physical to the spiritual. Most churches build their September conventions around those words and it's touted as a time for restoration of all the previous months have drained.

This year in Nigeria, the coinage took another meaning as the federal government doubled the suffering of Nigerians with a double whammy effect of electricity and fuel hike. It truly became a September to Remember, although in a negative sense.

On September 1, the Nigerian Electricity Regulatory Commission (NERC) raised electric tariff while the Petroleum Products Pricing Regulatory Agency (PPPRA), who vowed not to be left out, increased the fuel price too on September 2.

Sustainable Development Goals

The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by all United Nations Member States, of which Nigeria is a part of, in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.

The 2030 Agenda comprises 17 new SDGs, which will guide policy and funding for the next 15 years, beginning with a historic pledge to end poverty. Everywhere. Permanently.

The 17 SDGs are integrated--that is because they recognise that action in one area will affect outcomes in others, and that development must balance social, economic and environmental sustainability.

Through these pledge, Nigeria is supposed to- end poverty, ensure zero hunger, good health and well-being, provide quality education, ensure gender equality, provide clean water and sanitation, provide affordable and clean energy, provide avenue for decent work and economic growth, create industry, innovation and infrastructure, reduce inequality, build sustainable cities and communities, ensure responsible consumption and production, act on climate action, ensure life below water and on land, provide peace, justice and strong institutions as well as build viable partnerships for the goals.

Increment in Electricity Tariff

In apparent disregard to its pledge to achieve the SDGs, the federal government on September 1, increased electricity tariff. The Discos said electricity customers, except those receiving less than 12 hours of supply, would have to pay more. With the review, the tariffs being charged residential consumers receiving a minimum of 12 hours of power supply has increased by over 70 per cent.

Initially postponed from April 1, 2020, the Nigerian Electricity Regulatory Commission (NERC) approved the reflected tariffs, which was again supposed to commence July 1, 2020. It was postponed after reports indicated Electricity Distribution Companies, DisCos, had pushed for a postponement until key areas of disagreement are sorted.

Few months back, hope loomed in the horizon when the National Assembly promised tariffs will not increase until the first quarter of 2021 following several deliberations it held with stakeholders during which the DISCOs too admitted that they were not well prepared for the planned hike in tariffs even though they so much desired the increase.

The meeting agreed to defer the planned hike till first quarter of next year while the leadership of the National Assembly promised to meet with President Muhammadu Buhari on the issue. But that was promise unfulfilled as the increased hike still took place, albeit months after.

In practical terms, a test run by THISDAY over the weekend showed that N2,000 could only buy 36 KWH now as against 87 KWH that was obtainable before the hike, totaling a deficit of 51KWH.

Fuel Hike

On September 2, the federal government again increased the pump price of petrol to N151.56 per litre, up from N148, signaling the third increase in three months.

A statement by the Pipelines and Product Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), on Wednesday informed the depots owners of the increase.

This year alone, the price was on March 2020, reduced to N125 from N145 per litre. But in May 2020, the Petroleum Products Pricing Regulatory Agency (PPPRA) announced a new pump price band to between N121.50 to N123.50 per litre.

In July, it was further increased to between N140.80 and N143.80 and in August, it was again hiked to between N145.86 and N148.86 before this September increase to N151.56. However, most fuel stations sold at N160 over the weekend.

Government's Standpoint

Meanwhile, NERC while laying out a plan for the increase, stated that it would be a service-based tariff (SBT) regime , but noted that the "poor" would not be affected by the expected increase.

NERC insisted that SBT was designed to protect the poor, noting that only the wealthy customers in the areas that receive over 12 hours service will experience a tariff increase.

It noted that the service-based tariff will relieve the government of paying electricity subsidy on the rich and allow it to divert scarce resources to more pressing sectors, including education and healthcare.

But many industry watchers did not express surprise at the hike. According to them, it was a long time coming, especially with mounting pressure on government revenues and the clamour by the World Bank and the International Monetary Fund (IMF) for Nigeria to end its subsidy regimes on all sectors.

With the approval of $1.5 billion loan applied for by Nigeria from the World Bank hinged on the precondition of removal of subsidies, it was only a matter of time for the Nigerian government to cave in.

The new tariff signed off by President Muhammadu Buhari, to be reviewed every quarter, it seals a stamp on the fact that of the $1.5billion World Bank loan to be approved for Nigeria, $750million had been earmarked for the power sector.

Widespread Disillusionment

From civil servants to traders, teachers, professionals, the angst against the hike in the cost of electricity and fuel resonated. The reason is not far-fetched- while the cost of these two were increased, none of them experienced salary increased- some were even retrenched or took pay cuts.

Inevitably, this hike would only increase the high standard of living i.e cost of transportation, food stuff and other basic amenities. THISDAY sampled the opinion of some Nigerians and they all lamented on the same grounds, especially with the economic crunch brought by the ongoing COVID-19 pandemic.

Stanley Ugagbe: Journalist

The hike in fuel and electricity tariff has again shown that this government is not sensitive to the plight of the populace. At a time like this that Nigerians are groaning over the adverse effects of the ravaging pandemic, rather than looking for ways to mitigate the masses' pains, the government is bent on inflicting more pains on the citizens.

This jiggery-pokery development is repugnant. And talking about salary, there's no increment anywhere. I call on Nigerians to raise their voices to reject this egregious hike. If the government can no longer handle the situation of the country without plaguing Nigerians, they should honourably resign.

Femi Egunjobi: Engineer and Consultant

You can't definitely have an omelet without breaking an egg, which in turn means we as Nigerians collectively should always be prepared to do things differently to achieve different results. Many of the issues confronting us now a days isn't a problem of one government, In fact Nigeria's problems are dated back to the independence, leaders at various levels have failed us as a people and until we are all prepared to begin to think about what we can all do together to fix the country rather than what the country can give us then we are only just starting.

Look at the overseas we all admire today, the only reason things are working there is just because few variables that are missing in our own country.

Look at shrewdest way electricity was privatised in the country in 2014. I tell you what, many of the workers are yet to even get their pay-offs from the government as we speak. Round peg was never out in round hole, and yet people keep blaming the present day government.

Even petrol too, we have had a time crude oil was sold for several years more than 100 dollars per barrel. We even at one time had oil boom, yet nothing was done with the money on infrastructure that we should be falling on now. Nigeria has been a monolithic economy since inception yet nothing was done. Our earnings go only for recurrent expenditures, almost 74 per cent and tell me what we can do with the remaining 26 per cent in terms of capital expenditure, hence the borrowings.

Oluniyi Odewale: Chartered Accountant

Our leaders have no capacity to bring good things on the table! Its practically unthinkable to have raw materials (crude oil) and still export it to buy back refined products at exorbitant costs of forex over the years!

What does it cost government since 1999 till date to build modern refineries (even modular ones at each geopolitical zone). Does it mean none of them knows the right thing to do or are deliberately wicked! Honestly, we are paying for leadership failure, self centeredness, and greediness. Very unfortunate!

Fixed income earners bear the whole consequences of the imminent inflation as a result of this unprecedented price hike of petroleum products and electricity tarrif.

Opara Chidinma Jennifer: Insurance Sales Manager

The increment in the cost of electricity and fuel is doing more harm than good to the masses like me. Reason being that this increase did not in any way affect my salary which is my major source of livelihood in enjoying limited benefits such as electricity and other fundamentals.

And now, the fuel cost is affecting my transport fare to and from work as well as electricity bill being expensive, thereby making my work very slow and almost impossible to accomplish. The government as well as employers should please look into this national issue and provide equilibrium.

Adeseye Adeleye: Social Commentator

I speak on behalf of the highborn, freeborn, lowborn and slaves whose dreams were as tall as a staple when Buhari was declared the president of this country! We have endured and sacrificed and even tolerated the excesses of these government policies in the name of patriotism! We deserve a lot better from the government of the day. What an insensitive government! The hike in price of fuel and electricity at this depressing period is height of government insensitivity! At at time like this when there is economic meltdown, downsizing and COVID-19 recovery process, now this.

The downward spiral in our economy can still be linked to government ineptitude. My unreserved bitterness towards this government is their campaign lies. They have never fulfilled even one per cent of their promises and still gallivanting everywhere. Despite increase in taxes, levies, commodities, things are still 'worse off' under this government.

Adeshina Aliu Olanrewaju: IT Technician and Journalist

This is a very annoying decision the government has done for us at this difficult time, COVID-19 has done worse to us already than for the government to come and increase the hardship for us. I wonder if this present government feels the pain of the masses, the hike we have on fuel, electricity, and our cable TV now is what we expect the government to have done a lot of amendment before the increase.

If Nigeria as nation that produce oil still pay more on fuel, that means our leaders have failed us totally. In this same country that we have a lot of people who could not enjoy 12hours interrupted light not to talk of 24hours, we are still want them to pay more on that. This is not the way forward for us a nation. I wonder the kind of future we are building as a nation.

It will be so nice if the NLC and TUC come to our aid with a very big protest just like we did in 2012. This is what we need to do now because if we all keep quite and keep shouting on social media, the government will not do anything about that until they see the masses on the streets. The way things are going on in this country, it will come to a time when we will begin to stone our politician's car and cross them on the road if they fail to listen to us and have pity for those who voted for them.

Mr. ThankGod Asadu: Business Man

It's definitely not going down well for me. I've had reasons to curse the day I became a Nigerian but God knows the best. Spending time in Turkey, actually made me realise what we citizens of Nigeria are missing out on and why on earth will this government hike the prices of foodstuffs, electricity, fuel just to mention but a few and yet has made no substantial provisions for us to earn not to talk of increasing the salaries of those that are working.

Ms. Henrietta Okoye: Graphic Designer

The hike in electricity is taking a huge toll on my finances. I used to recharge units worth N5,000 and I was sure if it lasting up to a month. But now that same N5,000 worth of units is now 108 against the 400. It used to be N1,000 worth of units that used to be 43.3 but it's now 21.1. This is getting out of hand.

Endurance Evulukwu: Business Woman

As a business woman, I'm finding it really difficult as the price of deliveries is ever rising. From bus fares to bad exchange rates to this. It's very discouraging and I lose customers every day. Something should be done.

Ayomide Ojo: Make-up Artist

The hike in price of fuel and electricity has affected most individuals. It has really affected salary earners and also we entrepreneurs living in Nigeria as we budget every cent that goes in and out of our pockets , seeing the rise in price of fuel has really saddened the heart of people. As means of transportation has become very expensive due to the COVID-19 pandemic situation, a rise in fuel price will make it even more costly. I'm an entrepreneur, my salary is still quite the same.

Mbajunwa Obinna: IT Analyst

The naira losing its value is about to mean something to the common man and we almost don't care. Salaries have remained the same and we are about to spend double. Honestly I was pissed at first but I can't say I didn't expect it. So currently I am just indifferent. Nothing good has really happened in the last five years. This is no different.

Okafor Chinonso: Electrical Engineer

Well it's sad really. In a country where the electricity reliability is on the low side on an average, and fuel which has been acting as a help meet for the very much interrupted power supply is increased too. Increasing the cost of the aforementioned looks to me like a body shooting herself on both legs while making plans to move forward. Hopefully, there's a drive somewhere that'll move this body to their targeted location.

Even after isolating the fact that the increase in price of these two will lead to a rise in price of other things needed in our daily living, this action isn't favourable to the masses still. There are no rumours about increment in salary where I work, and I'm guessing that's the same energy in many other firms with respect to salary increment.

Organised Labour Kicks

As expected, with the dual hike, organised labour

kicked against the nationwide increase in electricity tariff implemented by power distribution companies.

Like the Nigerian Labour Congress (NLC), the Trade Union Congress (TUC), Manufacturers Association of Nigeria (MAN) and Chamber of Commerce and Industry, also kicked against it. According to them, the hike could could m recession in the third quarter of the year.

According to NLC President, Ayuba Wabba, while stating that the move would be resisted, charged the DISCOs against going ahead with the implementation of the new electricity tariff.

Reacting to the hike, TUC President and Secretary-General, Quadri Olaleye, and Musa-Lawal Ozigi, respectively, condemned the increase in petrol price and electricity tariff in the country.

They noted that increasing petrol prices and electricity tariffs, among others, "at a time people are losing jobs, businesses are not moving in the light of COVID-19, is, to say the least, wicked.

"This is disgustingly shameful. We urge the government to listen to the voice of reason and reverse the price immediately".

With the National Assembly keeping mum, it remains to be seen if the federal government would bow to pressure and revert the prices- but given the precondition for the World Bank loan, it just might be a tall order. But will the increments affect the 2030 SDG target by Nigeria? Certainly, as it would inevitably increase poverty rate with ripple effect on the standard of living.

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