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Insights on the Recent Electricity Tariff Increase in Nigeria

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An announcement by the Nigerian Electricity Regulatory Commission on Wednesday sanctioned a 300% surge in electricity tariffs, prompting Nigerians to grasp the implications of this decision.

The nod from NERC fixed the rate at 225 per Kilowatt for ‘Band A’ electricity consumers in Nigeria.

This move marks a notable departure from subsidized electricity within the Nigerian Electricity Supply Industry, especially given the prevailing issue of erratic power supply nationwide.

Sections Affected by the Price Elevation

NERC specified that solely Band A consumers, receiving a minimum of 20 hours of power supply from the eleven electricity distribution entities, are impacted by this increase.

As per Vice Chairman Musiliu Oseni, only a fraction of the 12.12 million electricity users in Nigeria, around 15%, fall under this band.

He clarified that the tariff hike will not impact customers falling under B, C, D, and E categories, who receive less than 20 hours of power supply.

Ramifications of the Fresh Electricity Tariff

The rise translates to a 300% uptick in costs for electricity consumers in Band A to maintain their power supply.

This essentially marks the end of electricity subsidies for Band A consumers.

Nevertheless, the increased tariff does not promise enhanced power supply for the affected consumers.

Commencement Date of the Tariff Adjustment

As per the latest tariff directive, the Discos initiated the implementation of the revised electricity tariff on April 3, 2024.

Consequently, Band A customers have already begun bearing the burden of a 300% surge in electricity expenses.

Meanwhile, from January 2024, electricity users across all bands in Nigeria have been grappling with inconsistent power supply, a predicament blamed on gas limitations by the Minister of Power, Adebayo Adelabu.

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