Monday, April 15, 2024

FG announces over 300% hike in electricity tariff

The Federal Government has announced an increase in electricity tariff for consumers who enjoy electricity supply for 20 hours per day, otherwise known as Band A customers.

Vice Chairman, Nigerian Electricity Regulatory Commission, Musliu Oseni, announced the agency’s approval of over 300 percent in electricity tariff for Band A customers, saying they will henceforth pay ₦225 kilowatts per hour, instead of the current ₦66.

He added that the commission has also downgraded some customers on Band A to Band B due to non-fulfilment of the required hours of electricity provided by the electricity distribution company, insisting that the review will not affect customers on the other Bands.

According to Oseni customers under the Band A classification represent 15 percent of the 12 million electricity customers in the country.

He added that the commission has also downgraded some customers on the Band A to Band B due to non-fulfilment of the required hours of electricity provided by the distribution companies.

“We currently have 800 feeders that are categorised as Band A, but it will now be reduced to under 500. This means that 17percent now qualify as Band A feeders. These feeders only service 15 percent of total electricity customers connected to the feeders.

“The Commission has issued an order which is titled April supplementary order and the Commission allows a 235 kilowatt per hour.”

Accordingly, power distribution companies will be allowed to raise electricity prices to N225 ($0.15) per kilowatt-hour from N68 for urban consumers this month effectively from April 1, 2024.

The latest electricity tariff hike is coming on the heels of the recent increase of base price for natural gas from $2.18 to $2.42 per Metric Million British Thermal Unit (mmbtu) by Nigerian Midstream and Downstream Petroleum Regulatory Authority.

Nigeria generates over 70 percent of its electricity from thermal power plants that are fired by gas.

Recall that the Multi-Year Tariff Order released by NERC in January 2024 for the electricity distribution companies was calculated based on the previous price of natural gas.

Gas producers including international and domestic oil and gas companies, have repeatedly called for the upward review in the price of the product, stressing that this would be an incentive to ramp up production.

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