FG’s Electricity Subsidies Hit ₦199.64bn In December

The Nigerian Electricity Regulatory Commission (NERC) has revealed that the federal government’s electricity subsidies increased by 2.76 percent in December 2024, reaching ₦199.64 billion, up from ₦194.26 billion in November.

In its December 2024 Multi-Year Tariff Order, published on Tuesday, the commission also announced that electricity tariffs across all customer categories would remain unchanged.

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EKO HOT BLOG reports that Customers in Band A will continue paying ₦209 per kilowatt-hour, while tariffs for Bands B to E have been frozen at rates effective since December 2022.

As a result of the policy, the government is expected to spend ₦29.10 billion subsidizing consumers under the Abuja Electricity Distribution Company, an increase from ₦27.86 billion in November. Similarly, ₦26.68 billion will go to subsidizing customers under Ikeja Electric.

The commission attributed the rise in subsidies to a higher exchange rate, pegged at ₦1,687.45 per dollar, an inflation rate of 33.9 percent, and adjustments in available power generation capacity.

Regarding gas-to-power pricing, NERC stated:
“The review maintains the benchmark gas-to-power price of $2.42/MMBTU based on the established benchmark price of gas-to-power by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.”

The commission added that the approved tariffs would remain in force but would be subject to monthly adjustments based on indices such as inflation, the NGN/dollar exchange rate, and gas-to-power prices.

Electricity Subsidies

This update reflects the federal government’s ongoing efforts to balance electricity pricing, consumer affordability, and economic realities amidst increasing subsidy costs.

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