It has been a daily dose of suffering for residents of serviced estates across the country who have had to contend with almost 80 percent increase in their power tariff following a sharp rise in the price of diesel used to power their generators.
The price of diesel has, in the last two months, jumped from between N900.00 and N950.00 per litre to N1,300 per litre depending on location and vendor. In February 2023, diesel was selling for N836.91 per litre. Other energy sources like gas and petrol have also seen sharp price increases.
Diesel prices have been on a steady rise since last year. According to a National Bureau of Statistics (NBS) report, the average retail price of the product paid by consumers increased by 168.26 percent on a year-on-year basis from a lower cost of N311.98 per litre recorded in February 2022 to a higher cost of N836.91 per litre in February 2023.
The report adds that, on a month-on-month basis, an increase of 0.98 percent was recorded from N828.82 in the preceding month of January to an average of N836.91 in February 2023.
Analysts link the current price jump to the effect of oil subsidy removal which has affected prices across all consumer products coupled with the naira devaluation and the high inflationary trend that has almost brought the economy to its knees.
Facilities managers at serviced estates are, expectedly, pushing the increase in diesel price to the residents by marking up power tariff paid by the residents who are also battling with rising food prices, children’s school fees, increased transport costs and other service charges.
In a message to the residents of one of the serviced estates in Lagos, the facilities manager who did not want to be mentioned, noted that they were struggling to provide power to the estate because proceeds generated from the purchase of electric token could not cover the cost of their monthly power expenses.
Though the manager notified the residents of tariff increased from N195.00/kilowatt to N250.00/kilowatt, representing about 30 percent increase, he cited a market survey showing a few estates that supply 24-hour power where tariff is N350.00/kilowatt, showing about 79 percent increase from N195.00 per kilowatt.
Giving a breakdown of the cost of providing power to the estate, the facilities manager said their monthly bill from Eko Electricity Distribution Company (EKEDC) was N1.2 million while generator diesel consumption per hour stood at 22litres at NN1,300 per litre, giving N28,600 per hour.
According to him, “the estate’s monthly diesel usage is 3,960 litres which is approximately 4,000litres while the monthly preventive and corrective maintenance on generators costs about N250,000.”
MKO Balogun, Group CEO, Global Properties and Facilities International (PFI), formerly WSP Facilities Management Company (WSP FMC) confirmed that estates services and maintenance costs have really gone up considerably.
“Yes, power cost has gone up as well as other costs, including employees, materials and consumables. All these are impacted by the current inflationary trends as well as changes in the cost of living,” he said, noting that estates and their managers were currently exploring ways to mitigate the impact of these increases on the residents.
Olalekan Akinwumi, an estate surveyor and valuer and president, Nigerian Facility Managers Association, also affirmed that the situation was challenging such that every fabric of services has really gone up. “The diesel cost and general mains supply are not encouraging service apartments and the occupants have their story to tell,” he said.
“The cost of alternative power supply has also gone up due to demand. Workers are demanding for more pay due to rising transportation cost; the whole thing revolves around the situation in the economy. There have to be meetings upon meetings to explain to residents why they have to reduce the hours of relying on generators. They are told that lifestyle has to change to maintain operations,” he said
Akinwumi stressed that, as cost rises, the burden is placed on residents, though they are encouraged to reduce the hours of running the generator since some of them cannot pay more than what they have budgeted for the year. “This also compels the facility manager to think ahead by making adjustments where necessary,” he said.
Source: BusinessDay
