Tariff Hike Pushes Power Firms Revenue to Record High Despite no Improvement in Power Supply to Nigerians

Tariff Hike Pushes Power Firms Revenue to Record High Despite no Improvement in Power Supply to Nigerians

  • Nigerian power firms have reported a record revenue in the last one year despite no much improvement on power supply
  • The increase in revenue is coming on the back of upward review of electricity tarrif by the the Nigerian Electricity Regulatory Commission (NERC)
  • Zainab Ahmed, minister of finance, recently announced that the federal government has removed electricity subsidy

A new report has revealed that the amount of money paid for electricity in Nigeria rose by 46% to N757 billion in 2021 from N516 billion paid in 2020.

The new figures was released by the Association of Nigerian Electricity Distributors (ANED) the umbrella body for the Distribution electricity distribution companies (DisCos).

According to the report, the amount paid by Nigerians is the highest since 2013 the power holding company was unbuldned to DisCos and the generation companies(GenCos).

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Power firm, DisCos
Summary of DisCos collection IN 2021 Credit: ANED
Source: Facebook

Despite the increase, the data from the report showed no relatively improvement on the amount of electricity consumed by Nigerians.

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BusinessDay also reports that ANED announced there were 10,056,285(10 million) electricity consumers in Nigeria that recieved 29,629 GWh of energy in 2021, a slight improvement from 28,249 GWh energy recieved by 9,957,571(9.9 million consumers).

The report said:

"The daily energy sent-out by the GenCos and wheeled by TCN in 2021 was on average 99,186 MWh (4,133 MW), which is about only 4.9% increase from 2020 (3,984 MW) and very insufficient to cover the huge unsuppressed demand in Nigeria"

On why there was an increase in revenue for the power companies, Part of the reports reads:

"“DisCos have benefitted from the tariff increases since November 2020 and have even improved the collection efficiency from an average of 67 percent to 69 percent in 2021."

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"The removal of the subsidy after the Extraordinary Tariff Review in November 2020, which resulted in an increase of the Allowed Tariff, has driven new records in revenues and collections."

Nigerian government announces over N225bn revenue from electricity export

Legit.ng in another report revealed that the Nigerian government made over N225 billion from electricity export to neigbouring countries.

The Central Bank of Nigeria provided the data while noting that the payment for 2021 was a decline when compared to the previous year

Niger, Benin, and the Togo Republic are the three major countries that bought electricity from the federal government

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

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