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The Nigerian Electricity Regulatory Commission (NERC) has greenlit a new cost-reflective tariff increase for electricity distribution companies, citing a staggering N1.6 trillion subsidy expenditure in 2024. Revealed in a Multi-Year Tariff Order for DisCos on Wednesday, the new tariff comes into effect from January 1, 2024.
Chairman of NERC, Sanusi Garba, clarified that the federal government plans to allocate N30 billion monthly, totaling N1.6 trillion, for electricity subsidies in 2024. This entails the government covering N90 of a N150 electricity bill, leaving consumers responsible for the remainder. He made the clarification while speaking to reporters in Abuja about the electricity subsidies in 2024.
DisCos are set to receive allocations based on their respective regions, with Enugu Electricity Distribution Company leading at N128.92 billion. To manage potential rate shock, NERC announced monthly adjustments to electricity tariffs. Other companies include; Abuja Electricity Distribution Company (N223.26 billion), Yola Electricity Distribution Company (N64.48 billion), Benin Electricity Distribution Company (N140.85 billion) and many more.
Despite earlier denials of a tariff hike, the Minister of Power, Adebayo Adelabu, affirmed ongoing subsidy payments for vulnerable groups. The government's N700 billion expenditure on electricity tariffs in 2023 adds complexity to Nigerians grappling with rising headline and food inflation, reaching 28.92% and 33.93%, respectively, in December 2023, according to the National Bureau of Statistics.
