The Nigerian Electricity Regulatory Commission (NERC), acting on behalf of the federal government, has given the green light for an upward adjustment in the cost-reflective tariff for electricity distribution companies in Nigeria.
The commission revealed that the subsidy allocated for electricity in 2024 is set to amount to a staggering N1.6 trillion.
The Multi-Year Tariff Order (MYTO) for Distribution Companies (DisCos), effective from January 1, 2024, was officially disclosed by NERC on its website.
NERC Chairman, Sanusi Garba, elaborated on the development, emphasizing that the federal government is slated to allocate 30 billion monthly, totaling N1.6 trillion, to subsidize electricity costs throughout the year.
Under this new tariff structure, for a hypothetical N150 electricity bill, the government would cover N90, leaving consumers responsible for the remaining portion. Various electricity distribution companies, including Enugu, Abuja, Yola, Benin, Ibadan, Eko, and Ikeja, will receive specified subsidy amounts.
To prevent abrupt rate hikes and minimize the impact on consumers, NERC announced that electricity tariff adjustments will be conducted monthly.
Garba explained, “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.”
This development follows recent speculation about an impending electricity tariff hike on January 1, 2024, which the regulatory body had initially denied. The Minister of Power, Adebayo Adelabu, emphasized the government’s commitment to subsidizing electricity costs, disclosing that N700 billion was spent on electricity tariffs in 2023.