Relief to consumers as NERC bows to pressure, announces tariff reduction

  • Market capitalization drops by N499.71bn from sell-offs

The Nigerian Electricity Regulatory Commission has released a new tariff order for May 2024, which will see a reduction in electricity rates for consumers.

It disclosed this in a statement signed by its management on Monday.

NERC said this decision comes after a thorough review of the macroeconomic parameters and exchange rate appreciations.

The revised tariff order, which affects all eleven electricity distribution companies in the country, will lower the end-user tariffs for Band “A” customers from NGN225/kWh to NGN206.8/kWh.

This change is expected to provide some relief to consumers who have been grappling with high energy costs.

In response to the NERC’s order, the electricity distribution companies, Abuja, Ikeja, and Ibadan Electricity Distribution Companies, among others, have begun to reduce the tariff accordingly.

The NERC has expressed its dedication to maintaining a regulatory environment that balances the interests of the consumers with the sustainability of the electricity supply industry.

This tariff reduction is part of the Commission’s ongoing efforts to ensure that electricity remains affordable for Nigerians while also encouraging efficiency and improvement in service delivery by the distribution companies.

The new tariff order is a reflection of the NERC’s commitment to its tariff methodology and its responsiveness to changes in the economic landscape. It is anticipated that this move will be well-received by the public and contribute positively to the Nigerian economy.

For more information, consumers are encouraged to contact their local electricity distribution company or visit the NERC’s official website.

“The statement read, “Pursuant to the tariff methodology adopted by the Nigerian Electricity Regulatory Commission, a revised tariff order covering the month of May 2024 has been issued by the Commission to the eleven (11) electricity distribution companies.

“The Commission has considered changes in the macroeconomic parameters over the preceding month of April 2024 and especially the appreciation of exchange rates – consequently, the Commission has approved a downward review of end-user tariffs for Band “A” customers from NGN225/kWh to NGN206.8/kWh.

“The Commission reaffirms its commitment to providing a balanced and effective regulatory regime serving the needs of the Nigerian Electricity Supply Industry.”

Consequently, in a move aimed at providing relief to its customers, Ikeja Electric Distribution Company has announced a significant reduction in electricity tariff for customers under Band A category.

Effective May 6, 2024, customers in this category will now pay N206.80/kWh, down from the previous rate of N225/kWh as stipulated by the Nigeria Electricity Regulatory Commission (NERC).

In a circular released by the management of the Distribution company on Monday, IE assured customers under Band A of a guaranteed supply of electricity for 20 to 24 hours daily.

The decision to slash tariffs for Band A customers underscores Ikeja Electric’s commitment to enhancing customer satisfaction and ensuring affordable access to electricity.

It, however, stated that electricity tariffs for Bands B, C, D, and E customers remained unchanged without adducing any reason.

The circular addressed to customers read, “Please be informed of the downward tariff review of our Band A feeders from N225/kWh to N206.80/kWh effective 6th May 2024 with guaranteed availability of 20-24 hours supply daily. The tariff for Bands B, C, D, and E remains unchanged.”

Also, the Ibadan Electricity Distribution Company has commenced reduction in tariff from N225/Kwh to N206.80/Kwh for band A customers in its coverage territory.

Speaking with reporters on Monday in Ota, Ogun, the Lead of Media Relations, IBEDC, Busolami Tunwase, said that the new tariff was effective from May 4.

Tunwase stated that customers using prepaid metres will be the first to experience the revised tariff while postpaid customers will feel the revised tariff at the end of the month.

She said “Customers using prepaid metres will be the first to experience the revised tariff – N206.80/Kwh whenever they sell this month of May.

“While for postpaid customers, the revised tariff will reflect in the electricity bills to be received at the end of May 2024.”

Speaking further, Tunwase said that the tariffs for bands B, C, D and E remain unchanged.

She assured the customers that IBEDC remains unequivocally committed to ensuring quality and improved service across our franchise.

The IBEDC coverage territory includes Oyo, Ogun, Osun, Kwara, and parts of Ekiti, Niger and Kogi.

Market capitalization drops by N499.71bn from sell-offs

The trading week commenced on a negative note as the local bourse’s All-Share index retraced, declining by 0.89 percent to close at 98,703.68 points.

This resulted in a corresponding decrease in the market capitalization of listed equities by 0.89 percent to N55.82 trillion, reflecting a total market loss of N499.71 billion.

Significant declines were observed in key stocks such as AIRTELAFRI, BERGER, IMG, INTENEGINS, and INTBREW, experiencing losses of -10.00 percent, -9.85 percent, -9.82 percent, -9.35 percent, and -9.00 perc, respectively.

However, buying momentum was evident in GUINEAINS, CORNERST, OANDO, NASCON, and WEMA, as their individual share prices surged by +10.00 percent, +10.00 percent, +9.94 percent, +9.94 percent, and +9.42 percent, respectively.

Despite the decline in the benchmark index, trading activity levels showed improvement, as further reflected in the number of gainers (38) compared to the losers (18) on the Exchange.

Total deals and value advanced by 14.27 percent and 26.10 percent to 10,624 trades and N8.95 billion, respectively.

Nonetheless, the total traded volume experienced a steep decline of 5.56 percent to 421.73 million units.

Moreover, there was a healthy dose of optimism across the sub-sectors, with the Banking, Insurance, Consumer, and Industrial Goods indices rising by 2.56 percent, 2.03 percent, 0.58 percent, and 0.25 percent, respectively.

The Oil/Gas sector remained unchanged. As the session concluded, ACCESSCORP took the spotlight as the most actively traded stock in terms of volume and value, with 98.24 million units, worth N1.76 billion, changing hands in 1,209 deals.

Market shifting focus to the foreign exchange market, the naira exhibited strength against the dollar, by 3.30 percent to close at ₦1,354.21 per dollar in the official market. At the parallel market, the Naira closed at ₦1,415.

Money Market NIBOR fell across the board for most maturities. However, the Overnight NIBOR rose by 0.51 percent to conclude at 28.11 percent signaling system illiquidity.

Key money market rates, such as the open repo rate (OPR) and overnight lending rate (OVN), increased to 27.38 percent and 28.47 percent.

In the Nigerian Interbank Treasury Bills Yield (NITTY) space, rates across all tenor buckets moved upward, with increases of 0.50 percent, 0.66 percent, 0.61 percent, and 0.28 percent the 1-month, 3-month, 6-month, and 12- month periods, thus, the average secondary market yield for Nigerian Treasury Bills increased by 0.37 percent to 21.70 percent.

In the bond market, the average secondary market yield for FGN Bonds stayed muted at 18.81 percent, despite slight trading activity across the short-term tenor. In the sovereign Eurobonds market, positive sentiment prevailed, causing a 3-basis point’s decrease in the average yield to 9.77 percent.\