Manufacturers Reject New Electricity Tariffs, DisCos Face Billions In Losses

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Manufacturers in Nigeria have refused to accept the recent increase in electricity tariffs, causing a standoff with power distribution companies (DisCos). The Manufacturers Association of Nigeria (MAN) is leading the opposition, arguing that the higher tariffs will worsen the challenges already faced by businesses in the country.

 

As a result, DisCos are now staring at potential losses amounting to billions of naira. They are considering disconnecting companies that refuse to pay the new rates approved by the National Electricity Regulatory Commission (NERC).

 

The Nigerian government, which used to subsidize a significant portion of electricity costs, has reduced these subsidies, leading to higher tariffs for consumers and businesses alike.

 

MAN has instructed its members to continue paying the previous tariff rates, amounting to N66/kWh, until the petition filed with NERC is resolved. The association is actively engaging with both NERC and DisCos to find a solution.

 

Despite ongoing negotiations, DisCos are threatening widespread disconnections to recoup their losses. Some manufacturers are exploring alternative energy sources to reduce their electricity expenses.

 

The standoff highlights the challenges within the Nigerian power sector, particularly regarding cost-reflective tariffs and the impact on industrial consumers.

 

DisCos’ revenue collections have been affected, with a substantial gap between the billed amount and actual payments from customers.

 

MAN accuses NERC of implementing tariff hikes without proper consultation, arguing that stakeholders, including manufacturers, should have been consulted before such decisions were made.

 

The situation remains unresolved as NERC reviews MAN’s petition, with both sides awaiting a fair and balanced verdict from the regulatory body.

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