The Chairman of the Nigeria Electricity Regulatory Commission (NERC), Sanusi Garba, has warned that reversing the recent electricity tariff hikes could force the Federal government to shoulder a massive ₦3.2 trillion subsidy in 2024.
Naija News reports that this announcement was made during a crucial stakeholders meeting convened by the House of Representatives Committee on Power.
Garba emphasized that without significant and sustained investment, Nigeria’s power sector is in jeopardy, with potentially catastrophic implications for national energy security.
He detailed the severe financial strains currently plaguing the sector, including issues with foreign exchange fluctuations and non-payment for gas, which are pivotal to maintaining a steady power supply.
“Prior to the tariff review, Distribution Companies (DISCOs) were only required to pay 10 per cent of their energy invoice,” Garba explained.
This financial instability has resulted in a marked decrease in gas supply and power generation, with frequent system collapses increasingly likely.
The NERC Vice Chairman, Musiliu Oseni, also supported the recent tariff increase, arguing it is essential to prevent a total shutdown of the sector.
Oseni pointed out the harsh reality that only N185 billion of the N645 billion allocated for subsidies in 2023 has been funded, leaving a significant shortfall.
In response, the Chairman of the House Committee on Power, Victor Nwokolo (PDP, Delta), acknowledged the complexities of the situation.
He noted that the committee is still gathering input, particularly from the Transmission Company of Nigeria and Generation Companies, which were notably absent from the meeting.
“The recent tariff adjustments were long overdue since 2022,” Nwokolo said, explaining that the sector’s inability to finance necessary upgrades is due in part to unforeseen demands from Nigeria’s population growth and the consequent need to expand the network infrastructure.
The discussions also touched upon the challenges posed by fluctuating exchange rates and security threats to power installations, which have increased operational costs.
Nwokolo stressed that any decision to halt tariff increases would require a full resolution from the House of Representatives, not just the committee level.
The post FG Will Require ₦3.2trn To Subsidize Electricity – NERC appeared first on Naija News.
The Minister of Power, Adebayo Adelabu, has offered insights into the current electricity tariff situation, suggesting that rates for Band A consumers could see a reduction if the exchange rate falls below N1,000 to a dollar.
This statement comes in the wake of significant changes to the electricity subsidy policy.
On April 3, the Federal Government, via the Nigerian Electricity Regulatory Commission (NERC), declared the cessation of subsidies for Band A electricity consumers, leading to an increase in tariffs from N68 per kilowatt-hour (kWh) to N255/kWh.
Meanwhile, tariffs for other consumer bands remain unchanged.
Band A customers, who enjoy the most consistent power supply, now face the highest tariffs. This adjustment has sparked widespread discussion about the affordability of electricity and its implications for both residential and commercial users.
During his appearance on Channels TV, Minister Adelabu addressed concerns about these tariff hikes. He pointed out that, despite the increase, the cost of electricity for Band A consumers is still lower compared to the expenses associated with fueling generators, which many Nigerians rely on due to inconsistent power supply.
Furthermore, the minister emphasized that tariff adjustments are heavily influenced by fluctuating exchange rates, as much of the power sector’s costs are dollar-denominated. This includes the import of equipment and machinery necessary for power generation and distribution.
Minister Adelabu expressed optimism that should the Naira strengthen against the dollar, dropping below the threshold of N1,000 to a dollar, there could be a corresponding reduction in electricity tariffs. Such a development would alleviate some of the financial burdens faced by consumers, particularly those in Band A.
He said, “The tariff is flexible. I can tell you if the naira gains more and the exchange rate comes down below N1,000 to a dollar, it must positively affect the tariff; and the tariff, even for Band A, will come down below the N225/KWh that we are currently charging.
“There are variable factors that go into the composition of the tariff, and we are not closing our eyes to it. We are publishing it, we are transparent, we are talking to Nigerians and all the power sector stakeholders. This administration is very serious, and we are committed to transforming the sector.
“The problem we are having is an accumulated problem of over 50 years. It will not disappear in one year, but we’ve been making consistent and gradual progress.”
The minister stressed that efforts are ongoing to upgrade customers on other bands to Band A as power generation improves in the next six months.
The President Bola Tinubu administration has been heavily criticized for the recent electricity hike, and groups and individuals have called for a reversal of the decision.
The post Dollar Exchange Rate: Minister Of Power Reveals When Electricity Tariff Will Reduce appeared first on Naija News.
A comprehensive list of areas under Ikeja Electricity Distribution Company (IKEDC) that are affected by the new electricity tariff has been compiled.
Naija News reported earlier that the Nigerian Electricity Regulatory Commission (NERC) officially sanctioned a substantial hike in electricity prices for customers falling under the Band A classification.
The Vice Chairman of NERC, Musliu Oseni, disclosed this information in a statement earlier.
Customers in this category would be charged N225 per kilowatt-hour (KW/h), a significant increase from the previous rate of N66 electricity tariff.
Below is the list of 45 areas that fall within the Band A under IKEDC:
1. 11-IjuINJ-T2-Water Works Abule Egba WATER WORKS COMPOUND IJU
2. 11-IjuINJ-T1-Galilee Abule Egba OLOWOLAJUOGBON, POPOOLA, BEHIND ELLIOT AND PART OF OBAWOLE
3. 11-ShashaINJ-T1-Coker Estate Akowonjo COKER ESTATE ( SEGUN ADEKOYA AND UNITY STREET)
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.
Naija News reports that the Vice Chairman of NERC, Musiliu Oseni, made this known in Abuja on Wednesday.
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.
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.
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).
The post BREAKING: Despite Economic Hardship, FG Approves Tariff Hike For Electricity Consumers appeared first on Naija News.
The federal government of Nigeria has approved the implementation of a fresh hike in electricity tariff in the country.
The upward review was confirmed by the chairman of the Nigerian Electricity Regulatory Commission (NERC), Sanusi Garba, on Wednesday who said the new rates are effective from January 1, 2024.
He, however, added that the government has decided to continue to subsidize electricity this year, hence consumers may not feel the impact of the upward review in tariff because the government would be paying the differential.
Asked for how long the government will pay the subsidy, Garba said: “Any time the government takes a decision on subsidy, we will take it into consideration in our next tariff.
“In other words, even if there is an upward review of the cost of electricity, the government will be absorbing the increase for as long as it can.”
The NERC chairman explained that based on the new tariff, non-maximum demand (MD) customers of the Abuja Electricity Distribution Company (AEDC) band will retain the N68.20 per kilowatt tariff.
The review has affected the cost-reflective tariff for the band, which was N88.47 in 2023 but is now N124.42 this year, indicating an N35.95 increase per kw. It means that the government has subsidised N35.95 for consumers in the category.
Under the Eko Electricity Distribution Company (EKEDC) band, non-maximum demand (MD) customers, who paid N67.48 last year, will still pay the same price this year. However, their cost-reflective tariff has moved from N89.03 last year to N114.84 this year. This indicates a subsidy of N25.81 per kw.
Garba, however, added that the cost of kilowatt of electricity differs from one Electricity Distribution Company (DisCo) to the other, owing to their economic peculiarities.
He emphasized that what was published on the NERC website is what the discos are expected to charge to remain in business, but because of the subsidy provided by the government, what consumers would actually pay won’t be up to the specified amount.
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.”
The post FG Approves Increase In Electricity Tariff (See New Rates) appeared first on Naija News.
Electricity distribution companies in the country have denied reports about plans to increase electricity tariffs beginning from January 1 2024.
The denial follows some earlier reports which claimed the distribution companies (DISCOs) had concluded plans to hike electricity tariffs beginning from the first day of 2024.
However, officials of some DISCOs who were contacted, as well as the Nigerian Electricity Regulatory Commission (NERC), have denied such plans.
The DISCOs revealed that they are yet to receive any such directive.
According to Punch, the Head, Corporate Communications, Jos Electricity Distribution Company, Adekole Elijah, when asked about the rumours, said: “We have not received any directive or order on that. I have also heard about the rumour, but it has not been confirmed. So at this moment, I am not aware of any such moves to hike electricity tariffs.”
He added, “I also read the claim in one of the dailies that there may be a tariff increase starting from tomorrow, but I’ve not received any correspondence to that effect. If there is a directive we cannot do it secretly, for once there is an increase everybody will know.
“So right now it is still a rumour, no order from the government or NERC directing us to commence or effect any tariff hike. At least till this minute that I’m speaking with you there’s no such directive.”
Also, the Head, Communications, Enugu Electricity Distribution Company, Emeka Ezeh, stated that no increase in tariff can occur except approved by NERC, and no such approval has been received.
He said, “There is no directive from NERC on that. Before such a thing would happen there has to be a directive from NERC, which is normally issued as a regulatory order in that regard.
“But as we speak, I’ve not seen any order or received any directive on tariff hike. That is the position. And even if a Disco is contemplating a hike in tariff, if NERC does not approve, it doesn’t happen.
“Also, before it is implemented, there has to be an approval issued by NERC giving that directive. So that is the position. As we speak there is no order from NERC and as a result there is no hike in tariff.”
Ezeh added that, “Even if we Discos wish to increase the tariff from here to wherever, as long as there is no order from NERC to that effect, it won’t happen. So that is the truth of the matter. Until an order is issued by NERC, what you heard is still just a rumour.”
An official of NERC who spoke in reaction to the reports of a planned electricity tariff hike also said the commission had not issued any order on tariff hike, but hinted that minor reviews of tariff were usually held every six months.
“I cannot confirm that story as true,” the official, who pleaded not to be named due to lack of authorisation, stated.
The post DISCOs, NERC Speak On Increasing Electricity Tariff In The New Year appeared first on Naija News.
The Nigerian Electricity Regulatory Commission (NERC) has disclosed it had not approved a hike in electricity tariffs as reviews do not always result in higher costs for consumers.
NERC made this known in a statement on Tuesday, 18th May 2022 titled ‘Notice of Compliance in Respect of the Biannual Review of the Revenue Requirements of Licenses’.
According to the NERC, where the impact of improved efficiency in operating parameters for individual licensees exceeded the impact of changes in macroeconomic parameters, end-users might be reduced as exhibited in some tariff classes under the Multi Year Tariff Order, MYTO 2022.
The clarification comes in response to outrage over recent allegations of power distribution companies, or DisCos, raising bills.
The commission announced that it would begin the processes for the July 2022 minor review of the MYTO 2022, in accordance with the Electric Power Sector Reform Act, EPSRA, and other extant industry rules, to consider changes in relevant macroeconomic indices, generation capacity, and CAPEX required for evacuation and distribution of available generation capacity in compliance with extant rules.
This article was originally published on Nigeria News
The Federal Government has asked Nigeria’s 11 Electricity Distribution Companies (DisCos) to increase tariff from the 1st of September 2021.
The directive was given in a letter by the Nigerian Electricity Regulatory Commission (NERC) titled “Tariff Increase Notification.”
According to the document titled:”023/EKEDP/GMCLR/0025/2021, dated 25th August 2021, and seen by The Nation, NERC gave DisCos the leverage to charge a service-based tariff.
It was gathered that the Eko Electricity Distribution Company (EKEDC), has already officially informed its customers on the decision of upward tariff adjustment effective from 1st September 2021.
The energy distributor informed its customers that “the increase will be reflected on the energy bill for October 2021, which will represent energy consumption for September 2021.”
EKEDC added that “for metered customers with internal vending arrangements, we urge you to adjust the rates accordingly to reflect the new tariff increase as released by NERC.”
In other news, Governor Samuel Ortom of Benue State has asked the presidency to stop shielding bandit terrorists and Boko Haram insurgents terrorising the country.
Naija News reported that the governor had labelled Buhari as the worst President to ever rule Nigeria, adding that the Nigerian leader is grossly incapable of managing the affairs of the country.
Reacting, the Presidency described Ortom as a very unprincipled man who is only motivated by the lust for personal gains.
But in an interview with BBC Pidgin on Saturday, the Benue governor asked the Muhammadu Buhari-led government to flush out bandits and Boko Haram members with immediate effect.
He urged the government to use the same zeal it used to arrest secessionist leaders like Sunday Igboho and Nnamdi Kanu, to hunt down the criminals.
Ortom also berated the Buhari-led government for failing to proscribe Fulani bandits as terrorists just like the way it branded IPOB as a terrorist group.
This article was originally published on Naija News
The House of Representatives has asked the Buhari-led government to stop the proposed increase of the electricity tariff for June.
This formed part of the resolutions by the lawmakers during Thursday’s plenary in the lower chamber of the National Assembly in Abuja, the nation’s capital.
They stressed that it was important to direct the Nigerian Electricity Regulatory Commission (NERC) to rescind its decision on the proposed increment in view of the hard times Nigerians were going through.
Similarly, the lawmakers mandated the House Committees on Power, Poverty Alleviation, as well as Labour, Employment, and Productivity to ensure compliance with the directive.
A member of the House, Aniekan Umanah, had raised a motion seeking that the nation’s electricity regulator should suspend the proposed increase in electricity tariff.
He wondered why there would be an increase in electricity tariff at a time when Nigerians were going through hard times and governments all over the world were providing means to cushion the effects of the COVID-19 pandemic.
According to the motion, the Electric Power Sector Act of 2005 established the NERC with a mandate to license Distribution Companies (DISCOs), determine operating codes and standards, establish customer rights and obligations, as well as set cost-reflective industry tariff.
The lawmaker stated that the Act prescribed its funding from 15 per cent of electricity charges paid by consumers to distribution companies.
He decried that NERC, working with the distribution companies, had increased the tariff five times since 2015, the latest being on January 1, 2021.
The Federal Government has dismissed reports that it is planning to significantly increase Electricity Tariffs in the country.
Recall that the Nigerian Electricity Regulatory Commission (NERC) had announced that it is set to introduce another tariff review for the 11 distribution companies (DisCos).
In a notice posted on its website on Monday, the NERC said the extraordinary tariff review is as a result of changes in inflation, foreign exchange, gas prices, available generation capacity and capital expenditure.
The commission stated that the review is expected to begin in July.
But reacting in a post on his Twitter handle on Saturday, Nigeria’s Minister of Power, Sale Mamman said instead of significant hike in electricity tariff, Nigerians should expect an increase in efficiency in the sector.
”The review planned by @NERCNG is in accordance with Section 76 of the Electric Power Sector Reform Act of 2005. The tariff for customers on service bands D & E (customers being served less than an average of 12hrs of supply per day over a period of one month) remains subsidized in line with the policy direction of the Federal Government.
”Section 76 of the Electric Power Sector Reform Act of 2005 provides clear guidelines for the periodic review of tariff (based on market data and submissions from licensees).The guidelines include the provision that the Commission shall give notice of activities related to tariff.
”The Multi-Year Tariff Order (MYTO) per NERCs regulation obtains inputs from operators in the market every 6 months to perform minor reviews and a major review is required every 5 years. Thus, as in January a minor review will occur in June. Given the timing for the Extraordinary review has also elapsed, a review will occur for consideration in January 2021.
”The Buhari administration remains faithful to the adopted resolutions from the Joint FGN-NLC/TUC Technical Committee on Electricity Tariffs which makes recommendations for
“NERC to conduct an extraordinary review of the MYTO to further review factors and align them with current evolving realities.
”The reason this recommendation was posited by the Committee was to ensure that efficiencies could be derived from an extraordinary review to further reduce tariff.
”Government is committed to increasing supplied energy to the grid through rapid expansion of infrastructure through the various facilities for the sector either to the DISCOS under strict terms or to the Transmission Company of Nigeria.
”Furthermore, the National Mass Metering Program is on course to reduce losses. To date more than 500k meters have been delivered to DISCOs in phase 0 of the program in 5 months (this exceeds the progress done for the entire MAP scheme).
”We will eliminate the metering gap during the life of this administration. This administration is not unaware of the challenges that Nigerians face which is why govt has continued to subsidise the band D and E consumers to pre-Sept 2020 rates (55% of grid connected customers),” he added.
