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The Federal Government via the Nigerian Electricity Regulatory Commission (NERC) has approved an increase of 300 per cent electricity tariff for Band A consumers in the country.
This was revealed by the Vice Chairman of NERC, Musiliu Oseni, who made this known in Abuja on Wednesday.
ADULAWO News reports that the Power distribution companies (DisCos) will be allowed to raise electricity prices to N225 ($0.15) per kilowatt-hour from N68 for urban consumers this month effectively from April 1, 2024, Leadership Newspaper reports.
But Oseni disclosed that the rate increase will only affect 15 per cent of the electricity customers in the country.
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According to the NERC boss, these customers, who represent 15 per cent of the population, also consume 40 per cent of the nation’s electricity.
‘Electricity Tariff To Rise By 300%’
Power companies in Nigeria are set to increase electricity tariffs to N200 ($0.15) per kilowatt-hour from the current N68.
Bloomberg news agency reported this anticipated hike, noting that it would affect about 15% of the population, who are said to consume 40% of the nation’s electricity.
The decision to raise the tariffs nearly threefold within weeks is part of Nigeria’s strategy to attract new investment into the energy sector and reduce the substantial $2.3 billion annual expenditure on electricity subsidies.
According to the platform, sources close to the presidency, familiar with the developments, revealed that these measures aim to make the energy market more financially sustainable and appealing to investors.
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Furthermore, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recently announced an increase in the price of natural gas, which fuels over 70% of the country’s electricity generation.
The new 2024 base gas price has been set for power sector companies and commercial users, as stated by NMDPRA’s chief executive, Farouk Ahmed, marking a shift from the previous rate of $2.18 to $2.42 per one million British thermal units (MMBtu).
Since the privatization of its generation and distribution sectors in 2013, Nigeria has regulated electricity tariffs through the Nigeria Electricity Regulatory Commission (NERC).