The Nigerian Electricity Regulatory Commission (NERC), acting on behalf of the federal government, has given the green light for a new cost-reflective tariff increase for electricity distribution companies in the country. NERC revealed that the electricity subsidy is projected to amount to N1.6 trillion in the year 2024.
This information was disclosed in the Multi-Year Tariff Order (MYTO) for Distribution Companies (DisCos), which was published on the official NERC website on Wednesday. The new MYTO for DisCos is set to be implemented from January 1, 2024.
NERC Chairman, Sanusi Garba, elaborated on the development during a press briefing in Abuja, explaining that the federal government plans to allocate 30 billion monthly, totaling N1.6 trillion, for electricity subsidies in 2024. Under this arrangement, if an electricity bill is N150, the government will cover N90, with consumers responsible for the remaining fraction.
Specific allocations for different electricity distribution companies include N128.92 billion for Enugu Electricity Distribution Company (EEDC), N223.26 billion for Abuja Electricity Distribution Company, N64.48 billion for Yola Electricity Distribution Company, N140.85 billion for Benin Electricity Distribution Company, N199.841 billion for Ibadan Electricity Distribution Company, N198.78 billion for Eko Electricity Distribution Company, and N238.201 billion for Ikeja Electricity Distribution.
NERC emphasized that monthly electricity tariff adjustments will be implemented to prevent abrupt rate hikes. Garba stated, ‘If we have determined that you should be paying N150 and the Federal Government says you should pay N60, it will pay the difference. Then that is what it is, and the government would now provide the money. One of the new things in the tariff order is, to avoid rate shock, we will now be doing the minor tariff review very frequently, like every month.’
In the final days of 2023, reports surfaced regarding a planned electricity tariff hike on January 1, 2024. However, NERC denied this claim. Minister of Power, Adebayo Adelabu, recently insisted on electricity subsidy payments during the review of the implementation of cost-reflective tariffs, stating, ‘We’re reviewing the implementation process of a cost-reflective tariff while ensuring continued government subsidy for vulnerable members of society.’ Adelabu revealed that the federal government spent N700 billion on electricity tariffs in 2023.
This development adds to the challenges faced by Nigerians, who are grappling with the new electricity pricing template amid headlines of increased inflation. According to the National Bureau of Statistics, headline and food inflation rose to 28.92% and 33.93%, respectively, in December 2023.”
The Nigerian Electricity Regulatory Commission (NERC), acting on behalf of the federal government, has given the green light for a new cost-reflective tariff increase for electricity distribution companies in the country. NERC revealed that the electricity subsidy is projected to amount to N1.6 trillion in the year 2024.
This information was disclosed in the Multi-Year Tariff Order (MYTO) for Distribution Companies (DisCos), which was published on the official NERC website on Wednesday. The new MYTO for DisCos is set to be implemented from January 1, 2024.
NERC Chairman, Sanusi Garba, elaborated on the development during a press briefing in Abuja, explaining that the federal government plans to allocate 30 billion monthly, totaling N1.6 trillion, for electricity subsidies in 2024. Under this arrangement, if an electricity bill is N150, the government will cover N90, with consumers responsible for the remaining fraction.
Specific allocations for different electricity distribution companies include N128.92 billion for Enugu Electricity Distribution Company (EEDC), N223.26 billion for Abuja Electricity Distribution Company, N64.48 billion for Yola Electricity Distribution Company, N140.85 billion for Benin Electricity Distribution Company, N199.841 billion for Ibadan Electricity Distribution Company, N198.78 billion for Eko Electricity Distribution Company, and N238.201 billion for Ikeja Electricity Distribution.
NERC emphasized that monthly electricity tariff adjustments will be implemented to prevent abrupt rate hikes. Garba stated, ‘If we have determined that you should be paying N150 and the Federal Government says you should pay N60, it will pay the difference. Then that is what it is, and the government would now provide the money. One of the new things in the tariff order is, to avoid rate shock, we will now be doing the minor tariff review very frequently, like every month.’
In the final days of 2023, reports surfaced regarding a planned electricity tariff hike on January 1, 2024. However, NERC denied this claim. Minister of Power, Adebayo Adelabu, recently insisted on electricity subsidy payments during the review of the implementation of cost-reflective tariffs, stating, ‘We’re reviewing the implementation process of a cost-reflective tariff while ensuring continued government subsidy for vulnerable members of society.’ Adelabu revealed that the federal government spent N700 billion on electricity tariffs in 2023.
This development adds to the challenges faced by Nigerians, who are grappling with the new electricity pricing template amid headlines of increased inflation. According to the National Bureau of Statistics, headline and food inflation rose to 28.92% and 33.93%, respectively, in December 2023.”