- The Nigerian government may implement another electricity tariff hike in October 2024, as monthly power subsidies increased to N181.63 billion in September, up from N102.30 billion in May.
- The Nigerian Electricity Regulatory Commission (NERC) has raised tariffs for Band A feeders to N225 per kilowatt-hour, following the removal of subsidies and ongoing rising power generation costs amid high inflation.
In October 2024, the Nigerian government may introduce another electricity tariff hike as monthly power subsidies surged to N181.63 billion in September. This figure marks an increase from N102.30 billion in May and follows a series of subsidy payments: N163.87 billion in July, N173.88 billion in August, and N181.63 billion in September.
This situation arose after the Nigerian Electricity Regulatory Commission (NERC) announced the removal of subsidies for Band A feeders on April 3, 2024, when the monthly subsidy was recorded at N140.7 billion. As a result, NERC approved a tariff hike for consumers receiving at least 20 hours of electricity daily, raising their rate to N225 per kilowatt-hour.
This decision prompted significant backlash from Nigerians, including labour unions and various institutions, as many saw their electricity bills triple following the removal of the subsidy.
In May 2024, when the subsidy fell to N102.30 billion, the government reduced the Band A tariff to N206.80 per kWh. However, the tariff increased again to N209 per kWh in July as the subsidy rose to N158 billion in June. The dollar exchange rate fluctuated throughout this period, at N1,494.1 in July, N1,564.3 in August, and N1,601.5 in September.
NERC also confirmed a benchmark gas-to-power price of $2.42 per Million British Thermal Units, based on guidelines from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, in line with the Petroleum Industry Act 2021. The rising costs of power generation, combined with an inflation rate of 32.15 per cent in August 2024, have led to speculation about another tariff increase in the upcoming Multi-Year Tariff Order unless power generation costs decline.