FG to spend N1.6trn on electricity subsidy for consumers in 2024 as NERC unveils new tariff regime
2 min read
By Chris Ochayi
The Federal Government has agreed to pay a total of N1.6 trillion as subsidies for electricity consumers in 2024.
Chairman of Nigerian Electricity Regulatory Commission, NERC, Engr. Sanusi Garba, who disclosed this at a media briefing im Abuja, explained that the amount represents a monthly average of N120 billion.
Engr. Garba, who announced the release of a new electricity tariff regime for the eleven Electricity Distribution Companies, DISCOs, said the utilities cannot implement the hike because the Federal has agreed to subsidize it.
The NERC boss stressed further that with the new policy electricity tariff will remain as it has been since December, 2022.
According to Garba, though the new Multi-Year Tariff Order 2024 has approved increases in rates, the decision of the Federal Government means consumers will not be paying higher price for electricity.
Speaking further, Engr. Garba added that the Federal Government will continue to subsidise electricity to ease the financial burden on Nigerians due to economic challenges confronting the country.
According to him, “The government has decided for now, arising from the cost of living crisis and so many others, to in the meantime continue to subsidize electricity.
“In the new tariff order just published by the commission, you will discover that the tariff is not going up but you will see what the Electricity Distribution Companies (DisCos) should be charging.
“You will also see in the tariff order the amount of subsidy the government will be providing to cover the gap between what they will charge and what they are allowed to charge.”
He said the new tariff contains what the DISCOs are allowed to charge based on government policy, if they are to remain in service.
He said “In the tariff, NERC included some provision that would ensure that the DISCOs pay what they are obligated to pay.
“The DISCOs are in the business of buying electricity from the Nigeria Bulk Electricity Trading Company, NBET, so they are to pay.”
Garba said that the Electricity Act which was signed by President Bola Tinubu in 2023 presented an opportunity for states to make laws and take charge of providing electricity in their franchise areas.
He said that the commission remained committed to working with the states in such a manner that the existing public utilities were nurtured to provide services to Nigerians and were utilised for what they were intended for.
