The Nigerian federal government has given the go-ahead for an increase in electricity prices in the country.
The decision was confirmed by Sanusi Garba, the chairman of the Nigerian Electricity Regulatory Commission (NERC), on Wednesday.
The new rates will come into effect on January 1, 2024. However, Garba also mentioned that the government will continue to subsidize electricity this year, so consumers may not notice the impact of the price increase as the government will cover the difference.
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 chairman of NERC explained that customers in the non-maximum demand (MD) category of the Abuja Electricity Distribution Company (AEDC) will continue to pay the tariff of N68.20 per kilowatt, based on the new tariff.
The cost-reflective tariff for this category has been revised from N88.47 in 2023 to N124.42 this year, resulting in an increase of N35.95 per kw. The government has subsidized N35.95 for consumers in this category.
For customers in the non-maximum demand (MD) category of the Eko Electricity Distribution Company (EKEDC), the price remains the same as last year at N67.48. However, the cost-reflective tariff has increased from N89.03 last year to N114.84 this year, resulting in a subsidy of N25.81 per kw.
Garba explained that the price of electricity per kilowatt varies among different Electricity Distribution Companies (DisCos) due to their unique economic circumstances. He stressed that the rates published on the NERC website are the charges that the discos are required to maintain in order to sustain their operations. However, thanks to the government subsidy, consumers will not have to pay the full specified amount.
