LAGOS, Federal republic of Nigeria March 4, 2015 (National Mirror) — Manufacturers Association of Nigeria, MAN, yesterday demanded reduction of electricity fixed charge from the initial average of N250, 000 to N25, 000 for small and medium scale industries, SMIs, across board.
The association, which made the demand at a meeting with the Nigeria Electricity Regulatory Commission, NERC, also asked that manufacturers should be allowed to continue with the old Multi Year tariff Order, MYTO, rate, pending the expiration of its tenure in 2017.
The group also called on NERC to consider and approve a uniform tariff for all manufacturers in the country; regardless of whatever location they are situated.
“We seek your understanding in the following areas: fixed charge should be reduced from the initial average of N250, 000 to N25, 000, particularly for SMIs, across board.
“The fixed charge should be pro-rated, based on the amount of energy consumed by companies. Manufacturers should continue to operate on the old MYTO rate, pending the life of its tenure, which is 2017.
“NERC should consider and approve a uniform tariff for all manufacturers in Nigeria, regardless of wherever they may be located, rather than giving some companies a preferential lower tariff advantage over the others because of their geographical location,” the group said.
Speaking on the side-lines of the meeting, Chief Executive Officer of Corart Group, Razaq Okulaja, said the industrial sector was under threat following the rising cost of energy, stressing that companies are laying off workers on daily basis as a result of crippling overhead costs.
According to him, even though power situation is not improving, there is geometric increment on tariff, making it almost impossible for companies to survive.
He disclosed that some companies were already contemplating moving to other countries where the power situation is not only stable but tariff is comparatively low.
Chairman of NERC, Dr. Sam Amadi said the Commission is already on top of the situation adding that by tomorrow, it would have finalised and communicate its decision to the public.
According to the NERC, the Commission is giving the issue accelerated treatment bearing in mind that the manufacturing sector is critical to the economy.
“We had extra-ordinary technical management meeting, and we have quick response to the situation on ground, we had a meeting on Wednesday, Thursday we finalise and then communicate to the public.
“We are very fast because this is about a sector that is critical to the economy, and this is also a reform that is succeeding, we do not want it derailed.
“At the same time, we are very clear in our mind; our job is to guarantee sustainability. We are not going to trade off the future of this country on present inconvenience.
“We must make sure that the price is able to attract investment and at the same time, we must make sure that the price in the meantime does not destroy a fledgling industrial base for this country. “The bottom line is that they have good case; sharp price increase. But that increase has explanation and NERC is going back to review the causal factors, including the loses projections and then see a way of bringing down the price,” he assured.
The President of MAN Dr. Frank Udemba Jacob, expressed satisfaction at the speedy manner in which the case was being handled by the Commission.
He also stated that MAN had a special purpose vehicle for generating power for industrial clusters but had to play it down when government gave it hope that the power situation will improve.
“MAN has Special Purpose Vehicle, SPV, for generating our power in some industrial clusters. This company was set up about six years ago but when we had a statement from government that power was going to improve we played it down. “But now with the situation the way it is, we are going to reactivate that again,” he said.
