FG To Pay N1.6trn Electricity Subsidy As Discos Unveil New Tariffs

The Nigerian Electricity Regulatory Commission (NERC) has approved new electricity tariffs for the 11 distribution companies in the country, effective from January 2024.

NERC chairman, Sanusi Garba, who made this known at a media interaction on Wednesday, however assured that customers will continue to pay the current tariffs as the federal government is to subsidise the increased tariffs to the tune of N1.6 trillion this year.

Garba said the federal government will continue to subsidise electricity to ease the financial burden on Nigerians due to economic challenges in the country.

NERC also approved a monthly tariff review of the DisCos going forward arising from changes in exogenous indices, which include changes in the inflation rates, Naira/USS exchange rates, and gas-to-power prices.

“Government has decided for now, arising from the cost of living crisis and so many others, to in the meantime continue to subsidise electricity. In the new tariff order just published by the commission, you will discover that tariff is not going up but you will see what the Electricity Distribution Companies (DisCos) should be charging.

“You will also see in the tariff order the amount of subsidy the government will be providing to cover the gap between what they will charge and what they are allowed to charge,” he said.

According to him, the new tariff contains what the DisCos are allowed to charge based on government policy, if they are to remain in service.

He said that in the tariff, NERC included some provision that would ensure that the DisCos pay what they are obligated to pay.

A breakdown of the approved tariffs indicates that the cost-reflective tariff for Abuja Electricity Distribution Company is N120.88 per kilowatt-hour (kWh).