Manufacturers warn against planned 40% hike in electricity tariff
By Rukayat Moisemhe
The Producers Affiliation of Nigeria (MAN) has warned that the deliberate hike within the electrical energy tariff will erode the revenue margin of operators within the true sector and reduce their skill to win bigger operations and build unique jobs.
MAN eminent that producers will within the fracture pass on the extra worth to the patrons of their products, resulting in win bigger the worth of the products available within the market and complicate the rising inflation fee within the nation.
Mr Segun Ajayi-Kadir, Director-Total, MAN, talked about this in response to fresh announcement to win bigger electrical energy tariff from July 1.
In step with the Nigerian Electricity Regulatory Commission (NERC), the win bigger used to be in response to the upward thrust of the pump designate of premium motor spirit (PMS) the upward thrust in inflation fee which used to be at 22.41 per cent, and a shift within the exchange fee from N441 to N750.
But the MAN Chairman who spoke in an interview with the NEWS Company of Nigeria described the deliberate win bigger as nasty
In step with him, a 40 per cent tariff win bigger right this moment would engender higher costs of manufacturing, lower revenue margin, manufacturing activities paralysis, lower revenue remittances to authorities among others.
He acknowledged that the absence of accurate, efficient and somewhat priced electrical energy supply in Nigeria had been a long-standing wretchedness for producers which compelled them to supplement with different power sources.
Regrettably, he eminent that the accessible different power sources such as diesel had change into exorbitantly expensive.
The MAN director fashioned talked about that producers spent no longer no longer up to N144.5 billion on sourcing different power in 2022, up from N77.22 billion in 2021, translating to 87 per cent win bigger within the worth of win entry to to different power sources.
He talked about the truth that authorities itself used to be owing N75 billion in unpaid electrical energy bill used to be indicative of how burdensome the worth of electrical energy had change into.
“Already, we’ve power constituting between 28-40 per cent within the worth structure of manufacturing industries.
“You would possibly maybe maybe think concerning the impact on manufacturing industries that are power-intensive such as metal processing, heavy equipment, and chemical substances manufacturing.
“A spike within the electrical energy tariff will erode the revenue margin of the producers and reduce their skill to win bigger operations and build unique jobs.
“Additionally, the sector’s competitiveness will with out a doubt aggravate because the excessive worth of the products will win within the community produced objects less aggressive, when put next with imported picks,” he talked about.
Ajayi-Kadir urged the Federal Govt and Nigerian Electricity Regulatory Commission (NERC) to as a substitute, be sure improved electrical energy generation, transmission and distribution to fulfill the revenue wants of the electrical energy supply industrial stakeholders.
He pressured out that authorities would possibly maybe maybe additionally calm be sure that no longer no longer up to , 90 per cent of electrical energy patrons had been metered to explain consumption reflective electrical energy bill price.
He also tasked authorities to formulate electrical energy policies that will maybe well again investments in power industrial to win bigger generation capacities and usher in tidy scale manufacturing of electrical energy.
“There is an pressing need for diversification of power sources and intensifying infrastructure funding within the facility sector.
“Because it is this day, the manufacturing sector, which is the engine of articulate, is calm struggling as a outcomes of inclement manufacturing environment in Nigeria.
“The expectation is that authorities will have interaction in huge and intensive consultations with the producers; focal level on measures that will salvage the sector and cease the trend of shutdown of factories, radiant the implications and the multiplier effects on employment and the financial system.
“Care wants to be taken to steer determined of introducing burdensome measures that will extra strangulate the manufacturing sector and your entire financial system,” he talked about.
(NAN)
