FG electricity subsidies hit N199.6bn despite exchange rate, inflation pressures

The Nigerian Electricity Regulatory Commission (NERC) has revealed a significant increase in federal government electricity subsidies, rising by 2.76 per cent to N199.64 billion in December 2024 from N194.26 billion in November.

According to CableNews24, this development, outlined in NERC’s December Multi-Year Tariff Order (MYTO) published on Tuesday, highlights the persistent financial burden of subsidizing electricity tariffs despite rising economic pressures.

Electricity tariffs across all customer categories remained unchanged. Band-A customers continued to pay N209/kWh, while rates for Bands B to E were frozen at levels set in December 2022. This freeze has left the government responsible for covering the growing subsidy gap.

According to the report, subsidies for Abuja Disco consumers rose to N29.10 billion, up from N27.86 billion in November, while Ikeja Electric customers received N26.68 billion in government subsidies.

NERC attributed the increase to several economic factors, including a surge in the exchange rate, which was pegged at N1,687.45 to the dollar, an inflation rate of 33.9 per cent, and variations in available generation capacity.

On gas-to-power pricing, the commission noted that “The review maintains the benchmark gas-to-power price of $2.42/MMBTU based on the established benchmark price of gas-to-power by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.”

“The approved tariffs shall remain in force subject to monthly adjustment of pass-through indices including inflation rate, NGN/dollar exchange rate and gas-to-power prices,” the commission stated.

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