Abuja Hotel Owners Reject Proposed Electricity Tariff Hike

HOFA Abuja

Abuja’s Hotel Owners Forum (HOFA) has strongly opposed the Abuja Electricity Distribution Company’s (AEDC) plan to increase electricity tariffs. At a recent DisCos rate review hearing convened by the Nigerian Electricity Regulatory Commission (NERC), HOFA President, Mrs. Funmi Kassim, expressed grave concerns that the proposed tariff hike would have dire consequences for the hospitality industry and could lead to the downfall of their businesses.

The AEDC attributed the need for tariff adjustment to the volatile exchange rate in the country, which currently stands at approximately N792 to a dollar. The proposed average tariff build-up presented during the hearing would see the DisCO charge N150.43/Kwh for electricity in order to meet its revenue requirements.

However, Kassim vehemently disagreed with this upward revision, emphasizing its negative impact on hotel owners. She pointed out that such a tariff increase could force many hotels in Abuja to shut down. Kassim also raised concerns about the promised 20 hours of electricity per day for hotels in Band A, which hasn’t been fully realized. Many hoteliers, as a result, continue to rely on costly generators to power their establishments.

Chief Temilola Akingbogun, the Chairman of Network for Electric Consumers Advocacy of Nigeria (NECAN), further supported HOFA’s position. He highlighted that electricity costs already account for a substantial 35-40% of running expenses for hotels in Nigeria, alongside other cost centers. This heightened expense burden on businesses, similar to the challenges faced by manufacturers, could deter potential investors and hinder the growth of the tourism industry.

The hotel owners and consumer advocates urged the AEDC and relevant authorities to reconsider the tariff hike, expressing concerns that such a move could have severe consequences for the hospitality and tourism sectors in Abuja. They stressed the importance of maintaining affordable and reliable electricity supply to sustain the growth and viability of businesses in the region.