Breaking: FG Puts Brakes On Tariff Increase, Commits N1.6 Trillion For Subsidy In 2024, Says NERC

Breaking: FG Puts Brakes On Tariff Increase, Commits N1.6 Trillion For Subsidy In 2024, Says NERC....KINDLY READ THE FULL STORY HERE▶

The Nigerian Electricity Regulatory Commission (NERC) released a new electricity tariff regime for the eleven electricity distribution companies (DisCos) on the condition that the hike cannot be implemented immediately. This is due to the Federal Government’s commitment to providing N1.6 trillion in subsidies for consumers in 2024, averaging N120 billion monthly……..CONTINUE READING

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According to the NERC, the new policy maintains electricity tariffs at the December 2022 levels. A detailed analysis of the order for specific DisCos reveals the extent of government subsidies. Under the Abuja Electricity Distribution Company (AEDC) franchise, the government is set to pay N233.26 billion (N19.44 billion monthly) as subsidies in 2024. Despite AEDC’s application for a cost-reflective tariff of N151.07/kWh, the Commission approved N120.88/kWh. With the tariff freeze, consumers will be charged N63.24/kWh, while the government covers N58.12/kWh.

For consumers served by Ikeja Electric, the government will pay N238.20 billion (N19.85 billion monthly) in subsidies for 2024. The Commission approved N112.10/kWh, lower than the requested N128.18/kWh as a cost-reflective tariff. Consumers will pay N56.60/kWh, and the government will provide N55.50/kWh as subsidy.

In the Enugu DisCo’s franchise area, consumers will benefit from a government subsidy of N129.92 billion (N10.74 billion monthly) in 2024. The approved tariff is N128/kWh, compared to the applied cost-reflective tariff of N155/kWh. With the tariff freeze, consumers will pay N59/kWh, and the government will cover N69.40/kWh as a subsidy.

Benin DisCo consumers will enjoy a cumulative subsidy of N140.85 billion (N11.74 billion monthly). Despite the utility’s request for an excessive N277.70/kWh as a cost-reflective tariff, the regulator approved N126/kWh. This translates to consumers paying N60.10/kWh, while the government subsidizes N65.90/kWh.

NERC Chairman, Engr. Sanusi Garba, emphasized that although the Multi-Year Tariff Order 2024 approves rate increases, the Federal Government’s decision ensures consumers will not experience higher electricity prices. He clarified that the published tariff order outlines what each DisCo should charge, along with the corresponding government subsidies to bridge the gap.

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