Another electricity tariff hike may be introduced in October 2024 by the Nigerian Government as the country\u2019s monthly power subsidy rose to N181,63 billion in September.<\/p>\n
This comes as the electricity subsidy by the Federal Government rose to N181,63 billion in September from N102.30 billion in May.<\/p>\n
In the last three months, the government paid N163.87 billion in July, N173.88bn in August, and N181.63bn in September 2024.<\/p>\n
This comes after the Nigerian Electricity Regulatory Commission announced the removal of subsidies in areas categorized as Band A feeders on April 3, 2024.<\/p>\n
NERC had revealed that the monthly electricity subsidy at that time stood at N140.7 billion.<\/p>\n
Consequently, NERC approved an electricity tariff hike for electricity consumers enjoying at least 20 hours of electricity daily, raising their tariff to N225 per kilowatt-hour.<\/p>\n
However, the decision generated serious outcries among Nigerians, including labor unions, educational and health institutions, whose electricity bills tripled following the removal of the subsidy.<\/p>\n
In May when the subsidy figure dropped to N102.30 billion, the government slashed the Band A tariff to N206.80\/kWh.<\/p>\n
NERC said the reason for the reduction was due to a fall in the exchange rate of the Dollar to the Naira.<\/p>\n
However, the tariff was jerked to N209\/kWh in early July as the subsidy rose again to N158 billion in June.<\/p>\n
Accordingly, in the period under review, the NERC put the dollar exchange rate at N1,494.1 in July; 1,564.3 in August; and N1601.5 in September.<\/p>\n
As of September, the NERC maintains the benchmark gas-to-power price of $2.42\/Million British Thermal Units based on the established benchmark price of gas-to-power by the Nigerian Midstream and Downstream Petroleum Regulatory Authority in line with Section 167 of the Petroleum Industry Act 2021.<\/p>\n
This indicates the rising cost of power generation in Nigeria.<\/p>\n
The development coupled with the country\u2019s inflation rate which stood at 32.15 percent in August 2024 had fueled speculations that there may be another tariff increase in the October Multi-Year Tariff Order unless the cost of power generation drops.<\/p>\n