The Nigerian Electricity Regulatory Commission (NERC) has approved a tariff increase for customers in the Band A category.
Musliu Oseni, the Vice Chairman of NERC, disclosed that customers in this band will now pay N225 per kilowatt-hour, a significant increase from the current rate of N66. Band A customers are those who receive 20 hours of electricity supply daily.
During a press conference held in Abuja on Wednesday, Oseni noted that approximately 15 percent of Nigeria’s 12 million electricity consumers fall under Band A. Furthermore, some customers have been downgraded to Band B due to their electricity distribution companies failing to meet the required hours of electricity provision.
Oseni explained that the number of Band A feeders will be reduced from 800 to under 500, meaning that 17 percent now qualify as Band A feeders, which only service 15 percent of the total electricity customers connected to the feeders. The commission has issued an order titled ‘April Supplementary Order,’ allowing for a 235 kilowatt-hour limit.
The tariff adjustment will not affect customers falling under other bands. The decision is aimed at attracting new investments and reducing the approximately $2.3 billion spent annually to subsidize tariffs. Bloomberg reported that power companies will be permitted to increase electricity prices to N200 per kilowatt-hour from the current N68 for urban consumers.
In addition to this, Nigerians will now pay $2.42 per one million British thermal units (MMBtu) of natural gas, up from the previous rate of $2.18 MMBtu. This adjustment aligns with the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s announcement on Monday regarding an increase in the price of natural gas, which is utilized to generate over 70 percent of Nigeria’s electricity.
