*Cites Inflation, FX As Reasons For Increase
Monies paid by the Federal Government as electricity subsidies increased to N199.64 billion in December 2024, according to data sourced from the Nigerian Electricity Regulatory Commission.
According to the newly released report, ‘December 2024 Multi-Year Tariff Order,’ electricity subsidies rose by 2.76 per cent to N199.64 billion this month from N194.26 billion in November.
NERC explained that the rise in the exchange rate, which it pegged at N1,687.45 to the dollar, the increase in inflation to 33.9 per cent, and changes in available generation capacity necessitated the minor review.
The report showed that the Federal Government retained electricity tariffs across all customer categories.
While Band-A customers continued to pay N209/kWh, tariffs for customers in Bands B to E were allowed to remain frozen at the rate payable from December 2022.
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With the policy, the Federal Government is expected to pay N29.10 billion (up from N27.86 in November) as subsidies for consumers under Abuja DisCo, while consumers under Ikeja Electric would enjoy electricity subsidies of N26.68 billion from the government.
On wholesale gas-to-power prices, NERC stated: “The review maintains the benchmark gas-to-power price of $2.42/MMBTU based on the established benchmark price of gas-to-power by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA”.
The Commission maintained that the “approved tariffs shall remain in force subject to monthly adjustment of pass-through indices including inflation rate, NGN/dollar exchange rate and gas-to-power prices”.
The development comes following the removal of petrol subsidies by President Bola Tinibu in May 2023.
The removal of petrol subsidies has since shot up petrol prices at the pump from around N189 per litre to above N1300 per litre.
