What you must know about new Electricity Tariff hike in Nigeria

After the Nigerian Electricity Regulatory Commission (NERC) approved a 250 percent increase in electricity tariffs on Wednesday, DAILY POST provides an overview of what Nigerians need to understand about the hike.

It’s worth noting that NERC approved a rate of N225 per Kilowatt for ‘Band A’ electricity consumers in Nigeria. This marks a significant departure from subsidized electricity in the Nigeria Electricity Supply Industry, amidst ongoing issues with inconsistent power supply nationwide.

Affected Customer Base:

NERC specified that only customers categorized under Band A, who receive a minimum of 20 hours of power supply from the eleven electricity distribution companies, are impacted by the increase. According to Musiliu Oseni, the Vice Chairman of NERC, this affects only 15 percent of Nigeria’s 12.12 million electricity customers. Customers in bands B, C, D, and E, who receive less than 20 hours of power supply, are not subject to the tariff hike.

Implications of the New Tariff:

This tariff hike translates to a 250 percent increase in the cost of electricity for consumers in Band A, effectively eliminating electricity subsidies for them. Band A customers, who make up 15 percent of urban households in Nigeria, consume 40 percent of the country’s electricity. However, this increase won’t necessarily result in improved electricity supply for the affected customers.

Commencement Date of the Hike:

As per the new tariff order, electricity distribution companies began implementing the new rates on Wednesday, April 3, 2024. This means that Band A customers have started paying 300 percent more for electricity. It’s important to note that since January 2024, customers across all bands have been experiencing inconsistent power supply in Nigeria. The Minister of Power, Adebayo Adelabu, attributed this to constraints in gas supply.