BREAKING: FG increase electricity tariff by over 50%

Emmanuel AmudaJanuary 5, 2021

0 2 minutes read

The Nigerian Electricity Regulatory Commission (NERC) has approved an increase in electricity tariff across the country with over 50 per cent.

According to a directive issued on December 31, 2020, and signed by Sanusi Garba, NERC chairman, the new tariff will take effect from January 1.

The new tarrif hike regime is to be paid by customers of the 11 electricity Distribution Companies, DISCOs.

The commission stated that the new tariff will be enforced until the issuance of another minor review order or an extraordinary tariff review order by the commission.

The NERC said some of the indices considered for the upward review include Nigeria’s inflation rate, exchange rate, US rate of inflation, available generation capacity, gas price, MDA losses and capex adjustment.

This is coming just two months after the Commission forced implementation of much opposed hike on Nigerians in November 2020.

In a revised Multi Year Tariff Order (MYTO) signed by the new Chairman of NERC, Engr. Sanusi Garba, on December 30, 2020, the new tariff increase took effect on January 1, 2021, and supersedes the previous Order NERC/2028/2020.

In the new Order NERC/225/2020, the commission said it considered the 14.9% inflation rate rise in November 2020, foreign exchange of N379.4/$1 as of December 29, 2020, available generation capacity, US inflation rate of 1.22% and the Capital Expenditure (CAPEX) of the power firms to raise the tariff.

The revised Service Based Tariff (SBT) also saw increase in the rates payable by all classes of electricity users unlike the one of November 2020, that exempted low power getters.

This is effective till June 2021 while a Cost Reflective Tariff (CRT) expected to raise the new cost higher will be activated from June to December 2021, the NERC Order revealed.

Recall NERC earlier in December, 2020, notified that it had begun a review for another tariff, which has been completed and had taken effect from January 1, 2021.

NERC had raised tariff for the DISCOs in September but that drew outrages from customers and the organised labour, prompting the Federal Government to suspend it to pave ways for parties to dialogue.

Subsequently, by November 1, 2020, the suspended tariff was implemented after some discounts were given for customers who get 12 hours and above power supply daily.