EDITORIAL: No to hike in fuel price, electricity tariff — Daily Times Nigeria

EDITORIAL: No to hike in fuel price, electricity tariff

Fuel price hike

The recent hike in electricity tariff and price of Premium Motor Spirit (PMS), popularly called petrol, has pitted the government of President Muhammadu Buhari against the Nigerian populace, majority of whom wallow in abject poverty.

This move which has unsettled all the major consumers of electricity and petrol shows how insensitive the government is to the plight of citizens and how distant it stands from them.

The new tariff was announced on Monday, 31st August and by Tuesday, 1st September the Distribution Companies (DISCOs) had already adjusted their tariff. By Wednesday, 2nd September the new pump price for petrol was announced.

This new electricity tariff is said to have been approved by the Nigerian Electricity Regulatory Commission (NERC) after the same had been endorsed by Mr. President who had set up a committee to review the proposal last June.

In its approval statement NERC asserted that, ‘following consultations and directions on tariff policy, the Commission (NERC) hereby approves the deferment of the applicable tariffs for customers in service band D and E (that is customers with service commitment of less than an average of 12 hour of supply per day over a period of one month) for the period 1st September 2020 to 1st January 2021’.

This gives the impression that the hike will not apply to the poor or lifeline customers, customers receiving 50 kWh per month and customers having below 12- hour supply daily.

It however, asserted that the price hike was inevitable else the economy would be brought to its knees.

Similarly, the government justified the increase in pump price of petrol by saying that it is deepening deregulation to avoid a resumption ‘of the business of fixing or subsidizing PMS prices which would mean a return to the costly subsidy regime with the potential return of fuel queues.’

The government is indeed at liberty to pursue policies that it considers best for the country.

No doubt, the contemporary Nigerian economy is predicated on free market principles which make minimisation of distortions necessary.

Lowering of taxes and subsidies come in handy here.

A drastic reduction of regulatory measures that have become obstructive to national development by increasing the cost of doing business comes to mind in this respect as well.

But the so-called ideology driven policies should align with economic realities of the country.

It is within this context that we view the hike in electricity tariff and petrol price as poorly thought out policy.

Nigeria’s macroeconomic environment is currently in disarray. Poverty has become endemic and polarised. Unemployment is pervasive with the rate of those out of job and those seeking employment jumping to an all-time high of over thirty per cent.

Exchange rate has deteriorated so badly that the importation of raw materials, consumer durables and food has translated into hardship for most people.

The inflation rate is already bracing a panicky digit of 15 per cent or more while income is on a steady state of decline with many now receiving less than 50 per cent of their pay.

Meanwhile, increased, and uncoordinated taxation has assumed the dimension of a sordid instrument of harassment and torture on the helpless people.

The minimum wage has not been implemented in most states of the federation while the exercise has been ridiculed by controversy in the states as well as federal level where it has been executed.

The take home pay of an average Nigerian is not competitive and therefore cannot give him access to the necessities of life.

Beyond all these, the world is still deeply held down by COVID-19 pandemic and Nigeria is part of that world.

The government does not understand the level of poverty in Nigeria. Let the truth be told. Many a Nigerian is simply battling to survive.

This is the circumstance under which the government has acted with total disregard to the living conditions of the people. One would think that this is the most inauspicious moment for such a draconian policy statement.

But the policy makers think differently.

The essence of governance is to improve on the welfare of citizens. What is expected of a government in a time like this is to show empathy by creating programmes that will ameliorate poverty.

Instead the government has not only told the people to go to hell; it seems to have also prepared the way for them to get there as soon as possible.

This is wickedness and inhuman. It is unbelievable that this has come from a government that won power by a popular mandate.

Why should a responsible government choose to mock the long suffering of the people by adding a huge financial burden to their abysmally low income?

It is not only the prices of electricity and petrol alone that have gone up. It has by this twin actions raised the price of every commodity and every service, from transport fares and services, house rents to the price of staple foods items like bread and rice.

The consumers of electricity and Premium Motor Spirit should not be the ones to bear the brunt of failed, misguided, or mismanaged privatisation and deregulation programmes in the power sector.

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Hiding under deregulation and revenue decline by 300 per cent to jack up prices of these strategic products is unacceptable to Nigerians.

Promises of efficient performance of the power sector and implementation strategies that will ensure that those exempted from the new tariff regime are not brought to the template through the back door are not convincing.

From experience, the government and the DISCOs cannot be trusted. The government should immediately reverse the hike in electricity tariff and the pump price of petrol.

The economy requires repositioning by minimising the cost of governance, embarking on a genuine course of fighting corruption, ensuring a harmonious operation of fiscal and monetary policies and enthroning rule of law while protecting the lives and properties of the citizens.

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