Current electricity tariff no longer realistic – FG

The Federal Government has disclosed plans to remove electricity subsidy for 15 per cent of consumers.⁣
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The move would reduce its N3.3tn cost and save the government about N1.1tn annually, the President’s Special Adviser on Information and Strategy, Bayo Onanuga, told Reuters on Tuesday, April.2, 2024.. ⁣
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Onanuga said the Bola Tinubu-led administration was poised to allow the price hike in electricity given its N450bn budget for energy subsidies in 2024. ⁣
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Consequently, power distribution companies will be allowed to increase prices from N68 to N200 per kilowatt-hour for urban consumers in April, the presidential aide explained in another interview with Bloomberg.
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He explained that the country last reviewed electricity tariffs in 2020, and the planned increase would enable Discos to recover costs and improve investments.⁣
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“With the huge subsidy burden and high cost of gas…the current electricity tariff is not realistic,” he told Reuters.
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Onanuga said the tariff hike would affect only 15 per cent of consumers, accounting for 40% of electricity consumption. ⁣
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He said the FG would help power generating companies to offset about N1.5tn debts they owe the country’s bulk electricity buyer.⁣
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An electricity report released by the National Bureau of Statistics on Monday showed that electricity distribution companies in Nigeria saw their revenues surge to N1.1tn in 2023.⁣ This is despite the persistent epileptic power supply nationwide.⁣
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The figure represents an increase of N234.4bn or 28.2 per cent from the N831bn generated by the power firms over a similar period in 2022.⁣
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Nigeria’s national power grid collapsed 46 times from 2017 to 2023, a report by the International Energy Agency revealed.⁣
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The IEA said Nigerians endured more nationwide blackouts in 2023, especially on September 14 when the grid collapsed due to a fire on a major transmission line.⁣
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