The Nigerian federal government has given the green light for a fresh hike in electricity tariffs, according to Sanusi Garba, the Chairman of the Nigerian Electricity Regulatory Commission (NERC). The new rates, effective from January 1, 2024, were confirmed by Garba, who also mentioned that the government will continue subsidizing electricity this year to mitigate the impact on consumers.
Despite the upward review, non-maximum demand (MD) customers in specific bands of electricity distribution companies will experience minimal changes in their tariffs due to government subsidies.
The chairman emphasized that the subsidy duration depends on government decisions, and any future tariff adjustments will consider the subsidy’s continuation.
While the cost-reflective tariff has increased for certain customer bands, the actual amount paid by consumers will be lower due to government subsidies.
The details of these changes vary across different Electricity Distribution Companies (DisCos) based on their economic circumstances.
The chairman said: “The commission has issued a tariff order that was just posted on our website yesterday (Tuesday).
“The tariff order contains the appropriate tariff the DisCos should be charging if they have to remain in business and the rules are very clear about the tariff order: some 110, some 120 and 130.
“Different DisCos have different parameters, efficiency levels and so on.
“But we have published what they should charge. We have also published the amount they are allowed to charge based on government policy because government has decided for now because of the living crisis, and so many things to in the meantime continue subsidizing electricity.
“So, if you check the order you will see that tariffs are not going up but the in the order, you will see what the DisCos should be charging.
“You can also see in the order the amount of subsidy the government will be providing to cover the gap, what they should charge that they are not allowed to charge without subsidy.”
