Nigerians to Pay More for Electricity as FG Hikes Tariff Again

By Adedapo Adesanya

Less than two months after the last increase in electricity tariffs, Nigerians are expected to start paying more for energy consumption as the Nigerian Electricity Regulatory Commission (NERC) has approved another 50 per cent hike in tariff payable by customers.

This was contained in a revised Multi-Year Tariff Order (MYTO) signed by the new Chairman of NERC, Mr Sanusi Garba, dated December 30, 2020.

In the document sighted on Tuesday by Business Post, the new tariff increase took effect from 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 per cent 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 per cent and the Capital Expenditure (CAPEX) of the power firms for the new hike in electricity tariff.

The revised Service-Based Tariff (SBT) also saw an increase in the rates payable by all classes of electricity users unlike the one of November 2020.

This newly revised tariff is expected to last until 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.

In November 2020, after pressure from the Nigeria Labour Congress (NLC), the federal government subsidised electricity to the service providers at N10.20 per kilowatt.

Under the old arrangement, non-MD customers in Band A with a minimum of 20 hours daily will pay N51.22/Kwh, Band B customers with a minimum of 16 hours daily will pay N46.93/Kwh, while Band C customers with a minimum of 12 hours daily will pay N37.95/Kwh. This, however, exempted customers in Bands D and E, which had their tariffs frozen.

But in the new arrangement, the prices have been increased by 50 per cent for all classes of consumers.