Electricity customers on Band A feeders may face a tariff hike as the electricity subsidy rose to N181.63 billion in September, significantly impacting power costs. The Nigerian Electricity Regulatory Commission's decisions and economic factors such as inflation and foreign exchange rates contribute to the uncertainty in electricity pricing.
Electricity customers on Band A feeders are facing the likelihood of a tariff increase as the electricity subsidy has surged to N181.63 billion in September, a sharp rise from N102.30 billion in May. The Nigerian Electricity Regulatory Commission (NERC) had previously removed subsidies for Band A customers—those receiving at least 20 hours of power daily—raising their tariff to N225 per kilowatt-hour.
The subsidy had been fluctuating in response to economic factors, including foreign exchange rates and inflation. As the cost of power generation continues to rise, experts warn that without a reduction in production costs, another tariff hike may be imminent. Power distribution companies are already feeling the strain, with some refusing to accept additional electricity from generators due to non-cost-reflective tariffs.
The Minister of Power, Adebayo Adelabu, has expressed concern over the distribution companies’ inability to utilize the available electricity, which poses risks to the grid's stability.
