NERC Announces Tariff Increase for Band A Electricity Customers

The Nigerian Electricity Regulatory Commission (NERC) has revealed a significant increase in the tariff applicable to electricity customers classified under Band A, who receive 20 hours of supply daily.

Speaking at a briefing in Abuja, NERC’s Vice Chairman, Musliu Oseni, disclosed that the tariff adjustment represents an over 300% hike, raising the rate from the current N66 per kilowatt hour to N225. He clarified that this revision would not impact customers classified under other tariff bands.

According to Oseni, customers falling within the Band A classification constitute 15% of the nation’s 12 million electricity consumers. Furthermore, he highlighted that some customers previously categorized under Band A have been downgraded to Band B due to their failure to meet the required hours of electricity provision stipulated by 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 17% now qualify as Band A feeders. These feeders only service 15% 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, DisCos 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.

This follows 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, NMDPRA. Nigeria generates over 70% of its electricity from thermal power plants that are fired by gas.

Recall that the Multi-Year Tariff Order, MYTO 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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