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FG approves new tariff for DisCos, to pay N1.6trn electricity subsidy in 2024

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The Nigerian Electricity Regulatory Commission (NERC) has approved new electricity tariffs for the 11 distribution companies (DisCos) in the country, with effect from January 1, 2024.

Sanusi Garba, NERC’s chairman, disclosed this on Wednesday during a news conference.

The NERC chairman had said the government will continue paying electricity subsidy due to the cost of living crisis.

Garba said consumers would continue to pay the current tariffs as the federal government will subsidise the new tariffs to the tune of N1.6 trillion throughout the year.

He said NERC also approved a tariff review of the DisCos, due to changes in the inflation rates, naira/US dollar exchange rates, and gas-to-power prices.

“In the new tariff order just published by the commission, you will discover that the tariff is not going up but will see what the electricity distribution companies (DisCos) should be charging,” he said.

“You will also see in the tariff order the amount of subsidy the government will be providing to cover the gap between what they will charge and what they are allowed to charge.

“The order seeks that prices charged by DisCos are fair to customers and are sufficient to allow DisCos to fully recover the efficient cost of operation, including a reasonable return on the capital invested in the business in accordance with section 116 of the Electricity Act 2023.”

He said the new tariff includes the fees DisCos are permitted to charge under government policy if they are to remain in service.

“Some N110/kWh, N120/kWh, N130kWh and so on, because DisCos as distinct legal entities have different operating parameters, different efficiency levels and so on,” he said.

“So on that basis, they also have different tariffs. So for the first time, we have published what they should charge. We have also published the amount they are allowed to charge based on government policy.

“Because the government has decided for now, arising from the cost of living crisis, in the meantime, to continue subsidising electricity.

“So in the new order just published by the commission, you will discover that tariff is not going up but you will see what the DisCos should have been charging and you will also see the amount of subsidy that the government will be providing to cover the gap between what they will charge and what they are allowed to charge.

“With the tariff allowed, the federal government will be expected to pay as high as N1.6 trillion to subsidise electricity in the year 2024 at a monthly average of N120 billion.”

GOVERNMENT TO PAY AEDC, IKEJA DISCOS SUBSIDY

The multi-year tariff report for 2024, published by NERC, which contains the new tariff review, took effect on January 1, 2024.

According to NERC, the tariff rates slated in the report will cease to be effective on the issuance of a new tariff review order.

A breakdown of the report showed that customers within the Abuja Electricity Distribution Companies (AEDC) franchise are expected to get subsidies worth an estimated N233.26 billion in 2024 (N19.44 billion each month).

There is N53.5/kilowatts per hour (kWh) shortfall for Ikeja Electric because their cost-reflective price is N128.18 whereas the approved tariff is N56.6.

Customers under the Ikeja Electric franchise are expected to receive a subsidy benefit of about N238.201 billion (or N19.85 billion each month) under this scheme starting in the year.

Ibadan DisCo customers are expected to receive subsidies worth about N199.841 billion in 2024.

In the same vein, the government will pay N128.92 billion (or N10.74 billion monthly) as subsidy for Enugu DisCo customers in 2024.

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Blackout in northern Nigeria as transmission lines trip

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The Transmission Company of Nigeria (TCN) has reported power outage in the northeast, northwest and parts of north-central after 330-kilovolt (kV) Ugwaji–Apir double circuit transmission lines 1 and 2 tripped on Tuesday.

In a statement via X by Ndidi Mbah, general manager, public affairs, TCN said the transmission lines tripped around 4:53am “due to a fault”.

“The Transmission Company of Nigeria (TCN) reports that its 330kV Ugwaji–Apir Double Circuit transmission lines1&2, tripped due to a fault, resulting in a forced power outage affecting the North East, North West and parts of North Central,” the commission said.

“At approximately 4:53 am, the Ugwuaji-Makurdi 330kV Line 2 tripped, and 243 MW on that line was transferred to Line 1 on the same route. At 4:58 am, Line 1 also tripped, resulting in a total loss of 468 MW. By around 5:15 am and 5:17 am, Line 1 and Line 2 were tried, but they all tripped immediately on the same relay indication.

“Following the tripping incidents yesterday, two teams of linesmen were dispatched—one from the Apir Transmission Sub-region and another from the Enugu transmission team—to expedite fault tracing along the 215 km route, which includes 245 transmission towers.

“Throughout yesterday, the Apir team patrolled the line, navigating difficult terrain in search of the fault, reaching as far as the River Benue. They could not locate the cause of the tripping and have continued the fault tracing early this morning.”

‘SIT-AT-HOME DIRECTIVE AFFECTED PATROL’

TCN said a ‘sit-at-home’ directive reportedly by the Indigenous People of Biafra (IPOB) affected the commission’s patrol activities.

Several social media posts on Monday suggested that the Indigenous People of Biafra (IPOB) had ordered south-eastern residents to sit at home on Monday and Tuesday.

“Meanwhile, the patrol team from the Enugu Region of TCN was unable to begin patrols yesterday due to the ‘sit-at-home’ directive in the South East for October 21st and 22nd, 2024,” TCN said.

“This restricted not only the patrol team but also made it difficult to refuel patrol vehicles for the long-distance line trace. However, arrangements were made for security operatives to guide the team, who have now commenced fault tracing this morning.

“Currently, TCN has restored supply to the 132kV transmission line from New Haven to Apir, but the 330kV lines remain out of service, affecting power supply in the northern region. Unfortunately, the TCN Shiroro-Mando transmission line is also down due to security challenges, causing a power outage in the North.”

TCN said challenging terrain, including swamps and rivers, as well as unsafe areas in forests, delayed their search for solutions on Monday.

“We sincerely apologise to the government and electricity consumers in all the affected states and acknowledge that our patrol teams would have continued their search into the night if not for the challenging terrain, which includes swamps and rivers, as well as insecure areas in the forest,” the commission said.

“We reconvened very early this morning with security operatives and have continued the fault tracing to locate and address the cause of the line tripping.”

TCN said the commission is making every effort to trace the cause of the outage to allow their engineers to carry out repairs and restore bulk power supply through both lines.

On Sunday, Sule Abdulaziz, TCN chief executive officer (CEO), said the commission is not to blame for all national grid collapses in the country.

Abdulaziz said system collapse could be caused by generation, transmission, and distribution issues.

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FIRS announces planned recruitment of tax officers across Nigeria

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The Federal Inland Revenue Service (FIRS) has announced plans to kick off recruitment of tax officers in various locations across Nigeria.

While applications are yet to be opened, the Service in a public notice released on Monday said the recruitment exercise is to create opportunities for young graduates to join the organisation.

https://www.facebook.com/plugins/post.php?href=https%3A%2F%2Fwww.facebook.com%2FFederalInlandRevenueServiceNG%2Fposts%2Fpfbid02Z82NwkeCv48orSc7d6HjwJTCt2b8oqnaUQHQsiWFC4vPeQ1Tu4bAbABiKCDJRVSFl&show_text=true&width=500

According to FIRS, Nigerians would soon be able to apply for the positions of Officer Il and Officer I on its website.

“We are looking for candidates with integrity and a strong desire to excel professionally, as well as those who possess strong analytical, problem-solving, and communication skills. 

“Further specific information regarding application procedures, including application deadlines and submission details, will be published shortly on our official website,” it said.

Although the eligibility criteria are yet to be release, the FIRS said it encourages all eligible candidates, regardless of gender, ethnicity, or background, to consider applying.

The announcement is generating reactions on social media, especially X, formerly Twitter. While some Nigerians see it as a positive development, others expressed pessimism, saying the announcement could be a mere formality.

“This is commendable. This is the first time I have seen open recruitment but the only last problem is that it can only be for a show and no child of a common man will get it without connection. But I really wish they could do it genuinely,” an X user, Ojo Samuel, wrote.

https://x.com/Tsamuel69/status/1848293483343159565

Another X user identified as @ajaxsim1 wrote: “It would be a great history if this FIRS could do as stated in the above fliers to make ordinary Nigerians be part of the exercise with sincerity, justice, and equity.”

https://x.com/ajaxsim1/status/1848300725320708565

However, another user identified as Mazi Vion Able Odogwu, was pessimistic about the recruitment saying it would be a waste of time.

“They’ve already recruited and the people have started work already. They are just formalizing it with this advert to complement what they’ve done already. Don’t waste your time people,” he said.

https://x.com/vykion/status/1848289864279568648
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Telcos reject 5% excise duty proposal, to meet Bosun Tijani to stop implementation

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The Association of Telecommunication Companies of Nigeria (ATCON) have rejected plans to reintroduce a 5 percent excise duty on the telecommunications industry.

According to an executive bill, titled ‘Nigeria Tax Bill 2024,’ the national assembly is seeking the reintroduction of a 5 percent excise duty on telecommunications services, gaming, betting, and lottery activities.

The proposed bill comes more than one year after President Bola Tinubu, signed an executive order suspending the 5 percent excise tax on telecommunication services.

Tony Emoekpere, president of ATCON, said the association is against the plan to reintroduce the excise duty.

According to Emoekpere, it would be unfair for the government to impose an excise duty when telecommunication companies are striving to sustain operations.

“We’ve been complaining already about the fact that the tariffs we are being charged have not increased for the last 10 years and the industry is actually groaning under the lack of revenue,” he said.

“To add this to the already existing situation is like a blow that might totally sink the sector.”

In 2023, new fiscal policy measures (FPMs) — approved by President Muhammadu Buhari — included supplementary protection measures (SPM), revised excise duty rates, and green taxes.

The FPMs also impose a 5 percent excise duty on mobile telephone services (GSM), fixed telephone, and internet services — postpaid and prepaid.

But, Isa Pantami, former minister of communications and digital economy had insisted that the sector remain exempted from the tax — citing a previous presidential approval for the exemption.

Emoekpere said the association thought since the sector was earlier exempted not just by the former minister but also by the current president, it had been a foregone issue.

TELCOS TO MEET MINISTER OF COMMUNICATIONS

The ATCON president said plans are underway to meet Bosun Tijani, minister of communications, innovation and digital economy, to prevent the implementation of the excise duty.

“We will be reaching out to the ministry to see what efforts they can make to discourage this attempt because it was actually attempted before by the former minister but we got word that it was stepped down so we’re surprised that they’re coming up again at this time,” Emoekpere said.

“We will be exploring all avenues to find out why it’s coming up again despite all the efforts of the former minister and why it is still arising.”

‘PROVIDE TAX BREAKS, INCENTIVES FOR TELECOMS SECTOR’

Emoekpere also called on the federal government to look into improving the sector as it is a major source of revenue and boost to the economy.

“What the government should be considering, is what are the primary causes of high costs of operations to the telecom sector and ways to ameliorate them,” he said.

“One of the biggest challenges is that fact that a bulk of the communication sites are dependent on diesel and this diesel costs, especially now that the foreign exchange market has been fully liberalised.

“So whenever FX changes, they also affect your cost of purchasing diesel and other petroleum products. This is a big challenge to the industry.

“So if they (the government) say we are not increasing the tariff, what are the measures they are giving in terms of tax breaks or tax incentives, are there ways whereby we can encourage more local production of some of the inputs into the sector?

“These are things the government should be looking at not adding additional excise duty tax on a sector that’s already really pushing forward.

“We don’t want to get to a situation whereby people are not able to communicate at all.”

Furthermore, he said the increase in tariff or excise duty does not affect the sustainability of the sector, adding that they are indirect taxes that go to the government.

Emoekpere said what telcos need at the moment is revenue to meet their operational needs, overcome losses and improve their services.

Telecommunications companies have been clamouring for an upward tariff review to make the sector attractive to investors.

On April 25, telcos said their services were overdue for price increments as they have not raised rates in the last 11 years.

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Bodex F. Hungbo, SPMIIM is a multiple award-winning Nigerian Digital Media Practitioner, Digital Strategist, PR consultant, Brand and Event Expert, Tv Presenter, Tier-A Blogger/Influencer, and a top cobbler in Nigeria.

She has widespread experiences across different professions and skills, which includes experiences in; Marketing, Media, Broadcasting, Brand and Event Management, Administration and Management with prior stints at MTN, NAPIMS-NNPC, GLOBAL FLEET OIL AND GAS, LTV, Silverbird and a host of others

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