FG Pays N135bn Electricity Subsidy to Ikeja Electric, Ibadan Disco, Others to Stop Tariff Increase
- A report by the Nigerian Electricity Regulatory Commission (NERC) has said that the Nigerian government paid N135 billion in electricity subsidy
- The amount covers subsidy payments for the second quarter of 2023 and is to plug the revenue shortfall
- NERC said the subsidy payment is also to stop the DisCos from increasing tariffs
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The Nigerian Electricity Regulatory Commission (NERC) has revealed that the federal government paid N135 billion as electricity subsidy in the second quarter of 2023.
The Nigerian government spent the amount to close the revenue generation shortfall in the power sector in the year's second quarter.
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FG incurs subsidy debt of N135 billion
The N135.2 billion spent by the government represents an increase of N99.21 billion, a 275% rise compared to the N36 billion it paid in Q1 of 2023, the NERC report indicates.
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Leadership says the report also said the government incurred a subsidy debt of N135.23 billion in Q2 of 2023, higher than the N36.02 billion incurred in Q1 this year.
NERC revealed that the subsidy was due to the absence of cost-reflective tariffs across all distribution companies, stating that the hike recorded in the period was due to the government's policy to harmonize exchange rates.
DisCos with the highest revenue remittance
According to the report, seven DisCos recorded more than 100% remittance performance.
They include
- Ikeja- 115.21 %
- Ibadan - 112.86%
- Benin - 111.32,
- Eko - 111.20%,
- Enugu - 108.52%
- Jos - 108.48%
- and Yola - 102.44%
The development shows that the DisCos improved remittance to Nigeria Bulk Electricity Trading Company (NBET).
DisCos deploy 178,864 meters, earning N267.86 billion in revenue
Meanwhile, distribution companies have deployed 178,864 meters and generated about N267.86 billion in revenue as of the end of the second quarter of 2023.
The NERC reported the meters were installed in the second quarter of this year, an increase of 3,583 installations or 2.004% compared to the 175,281 meters installed in Q1 of 2023.
The DisCos collected about N267.86 billion in revenue from the N354.61 billion billed to customers.
The report details the state of the Nigerian Electricity Supply Industry (NESI), covering the operational and commercial performance, regulatory functions, consumer affairs, and the commission's finances and staff development.
NERC increases the price of pre-paid meters
The development comes amid a hike in the price of pre-paid meters by NERC.
The price of pre-paid power meters increased following approval from the Nigerian Power Regulatory Commission (NERC).
This is coming after speculations of a 40% tariff hike by electricity distribution companies (DisCos). The DisCos had claimed they made over 40% losses due to escalating petrol prices, fluctuating exchange rates, and other economic conditions.
DisCos apply for a tariff hike
Recall that 11 Nigerian electricity distribution companies applied for the review of their electricity tariffs.
Legit.ng reported that there had been speculations of a 40% tariff hike by the DisCos, who claimed to have made over 40% losses due to escalating petrol prices, fluctuating exchange rates, and other economic conditions.
The proposed tariff surge had sparked an outcry by Nigerians, who were already suffering from higher petrol prices, food prices, and rise in transport fares, sparked by the recent removal of fuel subsidy.
DisCos consider dropping proposed electricity tariff Hike to 25% amid NERC approval delay
Legit.ng reported earlier that DisCos in Nigeria may eventually settle for a 25% hike in electricity tariff if the NERC and other stakeholders refuse to agree to a 40% increase.
This is according to a source who spoke with Legit.ng following a series of negotiations between the DisCos, NERC, and other stakeholders in the Federal Capital Territory, Abuja.
Source: Legit.ng
