NERC Announces Increase in Tariff Payable by Customers on Band A that Enjoys 20-Hours Supply

The Nigerian Electricity Regulatory Commission, NERC has announced an increase in the tariff payable by electricity customers on Band A classification who enjoy 20 hours of supply daily.

At a briefing in Abuja on Wednesday, NERC’s Vice Chairman, Musliu Oseni, said the over 300% increase will see the customers pay N225 per kilowatt hour from the current N66. He added that the review will not affect customers on the other Bands.

Oseni said customers under the Band A classification represent 15% of the 12 million electricity customers in the country. He added that the commission has also downgraded some customers on the Band A to Band B due to non-fulfilment of the required hours of electricity provided by the distribution companies.

“We currently have 800 feeders that are categorised as Band A, but it will now be reduced to under 500. This means that 17% now qualify as Band A feeders. These feeders only service 15% of total electricity customers connected to the feeders.

“The Commission has issued an order which is titled April supplementary order and the Commission allows a 235 kilowatt per hour.” Accordingly, power distribution companies, DisCos will be allowed to raise electricity prices to N225 ($0.15) per kilowatt-hour from N68 for urban consumers this month effectively from April 1, 2024.

This follows the recent increase of base price for natural gas from $2.18 to $2.42 per Metric Million British Thermal Unit, mmbtu by Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA. Nigeria generates over 70% of its electricity from thermal power plants that are fired by gas.

Recall that the Multi-Year Tariff Order, MYTO released by NERC in January 2024 for the electricity distribution companies was calculated based on the previous price of natural gas.

Gas producers including international and domestic oil and gas companies, have repeatedly called for the upward review in the price of the product, stressing that this would be an incentive to ramp up production.

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