Fresh Electricity Tariff Hike Looms as Nigeria’s Monthly Power Subsidy Hits N181.63 Billion
Nigeria may witness another electricity tariff hike in October 2024 as the country’s monthly power subsidy skyrocketed to N181.63 billion in September. This significant increase follows the Nigerian Electricity Regulatory Commission’s (NERC) removal of subsidies in areas categorized as Band A feeders on April 3, 2024.
The federal government’s electricity subsidy has been on an upward trend, rising from N102.30 billion in May to N163.87 billion in July, N173.88 billion in August, and N181.63 billion in September.
In April, NERC approved a tariff hike for electricity consumers enjoying at least 20 hours of electricity daily, raising their tariff to N225 per kilowatt-hour. However, this decision was met with widespread criticism, particularly from labour unions, educational and health institutions, whose electricity bills tripled following the removal of the subsidy.
In response to the backlash, the government slashed the Band A tariff to N206.80/kWh in May, citing a fall in the dollar-to-naira exchange rate. However, the tariff was increased to N209/kWh in early July as the subsidy rose again to N158 billion in June.
The Minister of Power, Adebayo Adelabu, has urged power distribution companies to take more energy to prevent grid collapse. As the NERC concludes its Extraordinary Tariff Review process, stakeholders await the outcome, hoping for a solution that balances the financial sustainability of the power sector with the affordability of electricity for Nigerian consumers.
