The Federal Government’s electricity subsidies increased to N199.64 billion in December 2024, according to data from the Nigerian Electricity Regulatory Commission (NERC).
The recently released report, titled ‘December 2024 Multi-Year Tariff Order,’ revealed that electricity subsidies rose by 2.76% from N194.26 billion in November to N199.64 billion in December.
NERC attributed this increase to factors such as the rise in the exchange rate, which stood at N1,687.45 to the dollar, a jump in inflation to 33.9%, and changes in available generation capacity, prompting a minor tariff review.
The report also noted that the Federal Government maintained electricity tariffs across all customer categories. Band-A customers continued to pay N209/kWh, while tariffs for customers in Bands B to E remained unchanged from December 2022.
Under this policy, the Federal Government is expected to pay N29.10 billion in subsidies (up from N27.86 billion in November) for consumers under Abuja DisCo, while consumers served by Ikeja Electric will benefit from N26.68 billion in subsidies.
On wholesale gas-to-power prices, NERC stated: “The review maintains the benchmark gas-to-power price of $2.42/MMBTU based on the established benchmark price of gas-to-power by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA”.
The Commission maintained that the “approved tariffs shall remain in force subject to monthly adjustment of pass-through indices including inflation rate, NGN/dollar exchange rate and gas-to-power prices”.
This development follows the removal of petrol subsidies by President Bola Tinubu in May 2023.
Since the subsidy removal, petrol prices have surged, with the cost per litre rising from approximately N189 to over N1,300.