The Nigerian Electricity Regulatory Commission (NERC) has projected that the recently approved electricity tariff will significantly reduce the subsidy expenditure for the fiscal year 2024 by approximately N1.14 trillion.
Mr. Musliu Oseni, Vice Chairman of NERC, disclosed this in a statement released in Abuja on Wednesday. He highlighted the Federal Government’s intention to transition to a targeted subsidy regime to mitigate the impacts of macroeconomic shifts.
“With the approval of the new tariffs, subsidies for the 2024 fiscal year are expected to decrease by about NGN1.14 trillion as part of the Federal Government’s efforts to realign the subsidy framework,” Oseni stated.
He emphasized that while safeguarding vulnerable customers, the revised tariff aims to encourage investments in enhancing service delivery in the Nigerian Electricity Supply Industry (NESI). The overarching goal is to establish a financially sustainable electricity market that provides reliable power to drive the Nigerian economy.
Oseni elaborated on the tariff review process, indicating that the commission meticulously evaluated the tariff proposals submitted by the 11 Electricity Distribution Companies (DisCos) by established regulations and business rules. The process included examining the licensees’ performance improvement plans and a public hearing where stakeholders and interveners scrutinized the rate filings.
Furthermore, Oseni assured that a mechanism for enforcement and compensation has been established to address service failures, with all DisCos mandated to meet investment targets and migrate more customers to Band categories. He underscored the commission’s commitment to transparency and accountability through a robust monitoring framework leveraging technology.
In a related development reported earlier by Nairametrics, the Federal Government, through NERC, raised electricity prices to N225/KWh for consumers classified as Band A, representing 15% of the nation’s 12 million electricity consumers. This adjustment, announced by Vice Chairman Musliu Oseni, is part of efforts to align tariffs with service levels and ensure fairness across customer categories.
