Nigeria Set To Increase Electricity Tariffs By 300%

Nigeria Set To Increase Electricity Tariffs By 300%

Power companies in Nigeria are gearing up to implement a substantial increase in electricity tariffs, raising them to N200 ($0.15) per kilowatt-hour from the current N68. This anticipated hike, reported by Bloomberg news agency, is expected to affect approximately 15% of the population, who consume 40% of the nation’s electricity……READ ALSO List Of States Set To Enjoy 10% Electricity Tariff Discount As Ramadan Promo

The decision to nearly triple the tariffs within weeks is part of Nigeria’s strategy to attract new investment into the energy sector and reduce the substantial $2.3 billion annual expenditure on electricity subsidies. Sources close to the presidency revealed that these measures aim to make the energy market more financially sustainable and appealing to investors.

Additionally, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recently announced an increase in the price of natural gas, which fuels over 70% of the country’s electricity generation. The new 2024 base gas price for power sector companies and commercial users has been set at $2.42 per one million British thermal units (MMBtu), up from the previous rate of $2.18.

Since the privatization of its generation and distribution sectors in 2013, Nigeria has regulated electricity tariffs through the Nigeria Electricity Regulatory Commission (NERC). Power firms have struggled to recover the cost of distributing electricity, with the government bridging the gap through subsidies.

Bayo Onanuga, a spokesman for the presidency, emphasized that the regulator (NERC) will make a pronouncement based on its discussions with distribution and generating companies. He highlighted the challenges facing the electricity sector, stating, “The presidency cannot say anything at this stage. Electricity sector is hurting.”

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