NERC Hikes Electricity Tariff From N68/KwH To N225

The Nigerian Electricity Regulatory Commission, NERC, has approved an increase of electricity tariff from N68 to N225 ($0.15) per kilowatt-hour. This represents a 300 percent hike and it takes effect from April 1, 2024.

However, the Vice Chairman of NERC, Musiliu Oseni, who made this announcement in Abuja, said, the price will be for urban consumers, also known as Band A consumers in the country.

Also, Oseni clarified that the rate increase will only affect 15 percent of the electricity customers in the country.

Oseni also revealed that the 15 percent customers consume 40 percent of the nation’s electricity.

Band A

NERC Service-Based Tariff, SBT, scheme classifies consumers based on the number of hours of electricity supply per day.

SBT, introduced on the 1st of November 2020, classifies consumers into Bands A to E as follows:

  • Band A: Minimum of 20 Hours
  • Band B: Minimum of 16 Hours
  • Band C: Minimum of 12 Hours
  • Band D: Minimum of 8 Hours
  • Band E: Minimum of 4 Hours

Recall that Frontline News Online reported a looming tariff increase by DISCOs as the Federal Government, on Monday, announced that the new price of natural gas for power generation companies is now $2.42 per metric million British thermal unit, higher than the previous rate of $2.18mmbtu.

Nigeria generates over 70 per cent of its electricity from thermal power plants that are fired by gas. Therefore, the rise in the cost of the commodity may lead to a hike in the tariff payable by power consumers once the Nigerian Electricity Regulatory Commission carries out another tariff review.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority, an agency of the Federal Government, unveiled the new domestic base price and wholesale prices of natural gas for 2024 in an announcement on Monday.

The NMDPRA also pegged the cost of commercial gas at $2.92mmbtu, up from the previous cost of $2.5mmbtu. The announcement was signed by the Chief Executive, NMDPRA, Farouk Ahmed.

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.

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