No More N89/kW: Ikeja Electric, Other DisCos Announce New Electricity Tariff, FG Approves Increase

No More N89/kW: Ikeja Electric, Other DisCos Announce New Electricity Tariff, FG Approves Increase

  • The Nigerian Electricity Regulatory Commission (NERC) has finally approved the plan to hike tariffs this January
  • Electricity Distribution Companies (DisCos) in Nigeria will now begin implementation of the new tariff
  • 11 electricity companies are serving Nigerians across the 36 states, which includes two for Lagos state

Legit.ng journalist Dave Ibemere has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.

The federal government of Nigeria, through the Nigerian Electricity Regulatory Commission (NERC), has approved the upward review of electricity tariffs.

Sanusi Garba, NERC's chairman, disclosed this while speaking with journalists after the Federal Executive Council (FEC) meeting in Abuja on Wednesday, January 18, 2024.

Electricity charges in Nigeria
Nigerian govt approves hike in electricity tariff Photo credit: Presidency
Source: Getty Images

He explained that the new tariff aligns with the Multi-Year Tariff Order (MYTO), which took effect from January 1, 2024.

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The Nation reports that the NERC chairman also revealed that the government will absorb some of the cost from the increase.

His words:

“Any time the government takes a decision on subsidy, we will take it into consideration in our next tariff.
“In other words, even if there is an upward review of the cost of electricity, the government will be absorbing the increase for as long as it can.”

Breakdown of electricity tariff

Speaking further, Garba noted that the cost of a kilowatt of electricity differs from one Electricity Distribution Company (DisCo) to another.

He revealed that non-maximum demand (MD) customers of the Abuja Electricity Distribution Company (AEDC) band will retain the N68.20 per kilowatt tariff.

The review has affected the cost-reflective tariff for the band, which was N88.47 in 2023 but is now N124.42 this year, indicating an N35.95 increase per kW. It means that the government has subsidized N35.95 for consumers in this category.

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Under the Eko Electricity Distribution Company (EKEDC) band, non-maximum demand (MD) customers who paid N67.48 last year will still pay the same price this year.

However, their cost-reflective tariff has moved from N89.03 last year to N114.84 this year. This indicates a subsidy of N25.81 per kW.

Further breakdown of the new tariff per DisCos can be found here.

NERC speaks on new electricity subsidy

In an earlier report by Legit.ng, NERC said wealthy Nigerians make up the highest consumers of electricity subsidies in Nigeria.

NERC revealed this in its 2022 Market Competition Report released on Wednesday, October 4, 2023.

The commission said the end-user tariff subsidy in Nigeria is more favourable to the rich as the top income earners in Nigeria consume more electricity than others.

It added that the average price spent on electricity is about N64.4 per kilowatt per hour using the former exchange rate in Nigeria, which was lower than the average tariff in West Africa.

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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