- On average, the electricity subsidy obligation incurred by the government per month was N45 billion in 2023/Q2.
- The total electricity generated during the quarter reduced to 8,867.05 Gigawatt per hour (GWh).
The Federal Government said it paid N135.2 billion for electricity subsidy in the second quarter of 2023. This increase in electricity subsidy is from N36 billion in the first quarter. This was contained in the Nigerian Electricity Regulatory Commission (NERC) quarterly report for the 2023 second quarter published yesterday. On average, the subsidy obligation incurred by the government per month was N45 billion in 2023/Q2. According to the report, during the period under review, the total revenue collected by all Distribution Companies (DisCos) was N267.8 billion out of the N354.61 billion billed to customers.
The report read in part, “In the absence of cost-reflective tariffs, the government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff shortfall funding. This funding is applied to the Nigerian Bulk Electricity Trading Plc (NBET) invoices that are to be paid by Distribution Companies (Discos). The amount to be covered by the Disco is based on the allowed tariff, determined by the commission and set out as their Minimum Remittance Obligation (MRO) in the periodic Tariff Orders issued by the commission.
“It is important to note that due to the absence of cost-reflective tariffs across all Discos, the government incurred a subsidy obligation of N135.23bn in 2023/Q2, which is an increase of N99.21 billion (+275 per cent) compared to the N36.02 billion incurred in 2023/Q1; this increase is largely attributable to the government’s policy to harmonise change rates. The DisCos overall collection efficiency increased by 6.79 percentage points from 68.75 per cent recorded in 2023/Q1. While the total collections increased by 8.41 per cent (compared to N247bn in 2023/Q1), the total billings declined by -1.33 per cent (compared to N359.3bn in 2023/Q1).”