The Nigerian government has given the go-ahead for an increase in electricity tariffs, with the Nigerian Electricity Regulatory Commission (NERC) revealing that subsidies for electricity will amount to N1.6 trillion in 2024.
NERC disclosed this in a Multi-Year Tariff Order for Distribution Companies (DisCos) published on its official website, stating that the new tariff would come into effect from January 1, 2024.
Chairman of NERC, Sanusi Garba, explained that the federal government is expected to spend N1.6 trillion on electricity subsidies in 2024, equating to N30 billion monthly. This means that the government will cover a substantial portion of electricity bills, with consumers paying the remaining fraction.
The tariff adjustments will be made monthly to prevent sudden increases in rates, Garba emphasized. He further explained that minor tariff reviews would be conducted more frequently to avoid rate shock.
There were earlier reports of a planned electricity tariff hike on January 1, 2024, which the regulatory body denied. The Minister of Power, Adebayo Adelabu, had also stressed the government’s commitment to providing subsidies for vulnerable members of society during the review of cost-reflective tariffs.
Against the backdrop of increased headlines and food inflation, the new electricity pricing template presents a challenge for Nigerians. In December 2023, headline and food inflation surged to 28.92% and 33.93% respectively, according to the National Bureau of Statistics.