The recent 240% increase in electricity tariffs for users enjoying a 20-hour power supply has drawn sharp criticism from manufacturers and organized labor. They argue that the removal of electricity subsidies will not only drive up business costs but also exacerbate inflationary pressures.
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Under the new tariff regime, Band A category consumers, representing 15% of total power users, will now pay N225 per kilowatt-hour, a significant jump from the previous rate of N68/kWh. Despite assurances that only Band A users would be affected, concerns remain about the broader economic impact.
Manufacturers fear that the hike will push them out of business, while organized labor condemns the move as insensitive and callous. They argue that with stagnant wages and already high operating costs, the tariff hike will burden consumers and potentially lead to job losses.
The decision to increase tariffs comes as the government grapples with the challenge of sustaining electricity subsidies, which have strained the finances of power generation companies. While the move aims to align energy costs with market realities, critics question its timing and impact on the already fragile economy.
Economists also warn that the tariff hike could worsen the plight of the populace, especially amid socio-economic challenges and widespread poverty. They advocate for a more gradual approach and urge the government to address underlying issues in the electricity value chain, such as technical losses and exploitative billing practices.
As the debate rages on, stakeholders emphasize the need for broad stakeholder engagement and transparent policy implementation to mitigate adverse effects on businesses and consumers alike.
