FG’s Electricity Subsidies Surge to ₦199.64bn in December — NERC

NERC reports a sharp increase in Nigeria’s electricity subsidies, reaching ₦199.64 billion in December, highlighting challenges in the power sector.

According to data from the Nigerian Electricity Regulatory Commission, the amount of money paid by the Federal Government for electricity subsidies rose to N199.64 billion in December 2024.

According to the newly released “December 2024 Multi-Year Tariff Order” report, electricity subsidies increased by 2.76 percent this month, reaching N199.64 billion from N194.26 billion in November.

NERC stated that the minor review was necessary due to several factors: the exchange rate rising to N1,687.45 per dollar, inflation climbing to 33.9 percent, and alterations in available generation capacity.

The report indicated that the Federal Government maintained electricity tariffs for all customer categories.

While Band-A customers still paid N209/kWh, the tariffs for customers in Bands B to E remained frozen at the rates set since December 2022.

According to the policy, the Federal Government is anticipated to allocate N29.10 billion for consumer subsidies under Abuja DisCo, an increase from N27.86 billion in November. Meanwhile, consumers served by Ikeja Electric will receive electricity subsidies amounting to N26.68 billion from the government.

Regarding wholesale gas-to-power prices, NERC announced: “The review upholds the benchmark gas-to-power price of $2.42/MMBTU, as determined by the established benchmark set by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).”

The Commission stated that the “approved tariffs will continue to be valid but are subject to monthly adjustments based on pass-through indices, including inflation rate, NGN/dollar exchange rate, and gas-to-power prices.”

This development follows President Bola Tinibu’s removal of petrol subsidies in May 2023.

The elimination of petrol subsidies has resulted in a surge in fuel prices at the pump, rising from approximately N189 per litre to over N1300 per litre.