NERC raises electricity tariff for customer having 20 hours power supply, electricity subsidy spending to crash by 52% on new tariff hike 

The Nigerian Electricity Regulatory Commission (NERC) has approved an increase in electricity tariff for customers under the Band A classification. Musliu Oseni, NERC vice-chairman, announced the approval during a press conference in Abuja on Wednesday. Oseni said customers under the classification, who receive 20 hours of electricity supply daily, will pay N225 per kilowatt (kW), starting from April 3 — up from N66. He said the new rate is just about three times the existing rate. Meanwhile, the government’s move to revise electricity tariffs is set to deliver a 52% cut in monthly subsidy expenses. The reduction will see the current N261.2 billion figure fall to around N125.94 billion, unlocking a significant N135.26 billion in monthly fiscal savings. Abuja, harbours the most considerable congregation of premium electricity consumers classified under Band A who will invariably bear the brunt of this cost recalibration.  

Here is a breakdown of the impact of the new tariff hike on the subsidy costs for each Power Distribution Company (DisCo) as presented by the Nigerian Electricity Regulatory Commission (NERC): “The commission sat and reviewed further the application by the distribution companies and have decided that only the 17 percent feeders and less than 15 percent customers will be affected by any rate increase that the commission will ever approve for the DisCos,” Oseni said. Further to that, the commission has issued an order titled ‘April 2024 Supplementary Order’ which is supplementary to the order issued in December, effective January 2024. So, the April Supplementary order takes effect and in that order, the commission has approved a rate review of N225 per kilowatt-hour for just under 50 percent of the customer population in NESI. 

“So that means that less than 15 percent of the customers will be affected. And I am sure you are aware of the number of customers we have in NESI. And these are the customers that are proven to be enjoying 20 hours of average hours of supply.” Oseni said the majority of the customers previously classified as Band A customers will not be affected, reiterating that less than 15