FG Announces Increase in Electricity Tariff By 300 Percent

The federal government has approved power companies’ move to raise electricity prices.

The federal government through the Nigerian Electricity Regulatory Commission, NERC, announced the increase earlier today.

NERC said it has given the go-ahead for electricity rates to be increased for customers in the Band A category.

During a press briefing in Abuja on Wednesday, the Vice Chairman of NERC, Musliu Oseni, announced that there will be a rise in electricity tariffs.

This adjustment will result in customers paying N225 per kilowatt-hour, up from the current rate of N66. Mr Musliu said:

“We currently have 800 feeders that are categorised as Band A, but it will now be reduced to under 500. This means that 17 percent now qualify as Band-A feeders.

These feeders only service 15 percent of total electricity customers connected to the feeders.

The commission has issued an order which is titled April supplementary order and the commission allows a 235 kilowatt per hour.”

However, Bloomberg news agency earlier reported that the federal government approved power companies’ move to raise electricity prices to N200 ($0.15) per kilowatt-hour from N68 for urban consumers this month.

It was also gathered that these customers represent 15% of the population that the government says consume 40% of the nation’s electricity.

The report added;

“Nigerians will now have to pay $2.42 per one million British thermal units from the previous rate of $2.18 MMBtu. Power firms aren’t allowed to charge enough to recover the cost of distributing electricity, with the government paying the difference as a subsidy to companies in the sector.

“The government has in the past said that electricity companies are short of an estimated two trillion naira in capital and need new investors to revive the industry.”

This is coming after the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced an increase in the price of natural gas, which is used to generate more than 70% of electricity in Nigeria.