Monies paid by the Federal Government as electricity subsidies increased to N199.64 billion in December 2024, according to data sourced from the Nigerian Electricity Regulatory Commission.
The recently released “December 2024 Multi-Year Tariff Order” report reveals that electricity subsidies increased by 2.76% to N199.64 billion in December, up from N194.26 billion in November.
The Nigerian Electricity Regulatory Commission (NERC) attributed this adjustment to factors such as a rise in the exchange rate, which it set at N1,687.45 to the dollar, an inflation rate increase to 33.9%, and changes in available generation capacity.
The report also highlighted that the Federal Government has maintained electricity tariffs across all customer categories.
For Band-A customers, the rate remains at N209/kWh, while tariffs for customers in Bands B to E have been kept unchanged at the rates established in December 2022.
With the policy, the Federal Government is expected to pay N29.10 billion (up from N27.86 in November) as subsidies for consumers under Abuja DisCo, while consumers under Ikeja Electric would enjoy electricity subsidies of N26.68 billion from the government.
On wholesale gas-to-power prices, NERC stated: “The review maintains the benchmark gas-to-power price of $2.42/MMBTU based on the established benchmark price of gas-to-power by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA”.
The Commission maintained that the “approved tariffs shall remain in force subject to monthly adjustment of pass-through indices including inflation rate, NGN/dollar exchange rate and gas-to-power prices”.
The development comes following the removal of petrol subsidies by President Bola Tinibu in May 2023.
The removal of petrol subsidies has since shot up petrol prices at the pump from around N189 per litre to above N1300 per litre.
