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Nigerian govt increases electricity tariff by over 50%

A rise in the electricity tariff payable to electricity consumers in Nigeria has again been approved by the Nigerian government.

More than a 50 per cent rise in electricity tariff payable by customers of the 11 Distribution Companies, DisCos, was approved by the Nigerian Electricity Regulatory Commission, NERC.

A Multi-Year Tariff Order (MYTO) signed by the new NERC Chairman, Sanusi Garba, on 30 December 2020, was announced by the Daily Trust to indicate that the latest tariff increase took effect on 1 January 2021.

The latest increase is coming just two months after the adoption of last year’s proposed contentious increase.

“The Nigerian Electricity Regulatory Commission hereby state unequivocally that NO approval has been granted for a 50% tariff increase in the Tariff Order for electricity distribution companies which took effect on January 1, 2021.” Read full statement

Tropics Nigeria accepts that the former Order NERC/2028/2020 is superseded by the new order.

“In the new order, NERC said it took into account the “…14.9 per cent increase in inflation rate in November 2020, N379.4/$1 foreign exchange as of 29 December 2020, available generation capacity, 1.22 per cent US inflation rate and the power firms’ Capital Expenditure (CAPEX) to lift the tariff…

The revised Service-Based Tariff (SBT) also saw a rise in prices payable by all groups of electricity users, unlike the former order introduced in 2020, which exempted low-power consumers.

The order is valid until June 2021, while the new higher cost will be triggered from June to December 2021 with a reflective cost tariff (CRT) expected to rise.

NERC announced last December that it had started a review of the new tariff.

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