- This comes four months after the Nigerian Electricity Regulatory Commission (NERC) deferred electricity tariff increase.
- In the first six months of 2023, the Federal Government and end users spent about N686.18 billion on subsidies or bill payments.
Stakeholders in the power sector are beginning to demand a cost-reflective tariff as the Federal Government continues to pump more money to defend the electricity sector. This comes four months after the Nigerian Electricity Regulatory Commission (NERC) deferred electricity tariff increase. The stakeholders made this known at the Nigerian Electricity Supply Industry (NESI) conference in Abuja, stating that a cost-reflective is critical in the power sector if the sector would progress.
The Country Director, Energy Market and Rates Consultant Limited, EMRC, Rahila Thomas, stated that while the regulatory body should review the tariff every six months, the reverse has been a reality. According to her, regular tariff review is sacrosanct with rising inflation, forex and other critical variables like generation capacity.
“A review ought to have happened in July. The realities in inflation and forex mean tariffs ought to have gone up, but this hasn’t been done for political reasons. The government is now paying subsidies amounting to N3.34 trillion. Out of that, the government has paid N2.8 trillion to support the tariff,” they stated.
Despite dismal electricity supply averaging a daily load offtake of 3,200 megawatts, the Federal Government and end users, in the first six months of 2023, spent about N686.18 billion on subsidy or bill payment. Given indications that the electricity subsidy, which is increasing by N135 billion quarterly, could push the 2023 total to N441 billion, the government has paid at least N171 billion as subsidies in the last six months.