Nigeria could see another electricity tariff increase in October 2024, as the country’s monthly power subsidy surged to N181.63 billion in September.
This marks a significant rise from N163.87 billion in July and N173.88 billion in August, with a lower subsidy of N102.30 billion recorded in May 2024.
The Nigerian Electricity Regulatory Commission (NERC) had previously removed subsidies for areas served by Band A feeders in April 2024, when the subsidy stood at N140.7 billion.
At that time, NERC also approved a tariff increase for consumers receiving at least 20 hours of electricity daily, raising the rate to N225 per kilowatt-hour (kWh).
This decision sparked widespread protests from labor unions, schools, and hospitals, as their electricity costs tripled after the subsidy removal.
In response, the government reduced the Band A tariff to N206.80/kWh in May, which coincided with a drop in the power subsidy to N102.30 billion due to the weakening of the Naira.
However, the tariff was raised again to N209/kWh in July as the subsidy climbed back to N158 billion in June. NERC adjusted the Dollar exchange rate to N1,494.1 in July, N1,564.3 in August, and N1,601.5 in September.
NERC continues to maintain a gas-to-power price of $2.42 per Million British Thermal Units (MMBTU), in accordance with the Petroleum Industry Act of 2021, reflecting the rising costs of power generation in Nigeria.
With the nation’s inflation rate hitting 32.15 percent in August 2024, there is growing speculation that another tariff increase could be introduced under the October Multi-Year Tariff Order, unless power generation costs stabilize.
