Electricity Subsidy: FG Raises Tariffs for Top Priority Customers by 230.8%, N225/kwh

The federal government has announced a significant increase in electricity tariffs after a two-year tariff freeze in the power sector. The rate paid per kilowatt hour (kwh) of electricity has been raised from about N68 to N225 for Band ‘A’ customers, who consistently enjoyed 20 hours of supply daily.

The announcement of the tariff increment was made by the power sector regulator, Nigerian Electricity Regulatory Commission (NERC), in Abuja. NERC stated that only about 15 percent of the over 12 million registered power customers would be affected by the new decision.

However, the 300 percent tariff increase in one go has been met with criticism from various quarters. The Centre for the Promotion of Private Enterprises (CPPE) and Senator Shehu Sani described the tariff hike as indefensible. Engr. Adebiyi Adeyeye, the National President of the National Union of Electricity Employees (NUEE), urged President Bola Tinubu to declare a state of emergency in the power sector in response to the tariff increase.

NERC justified the decision to raise tariffs, stating that it would relieve the federal government of the burden of paying N240 billion per month and N2.9 trillion per year as electricity subsidy. The reintroduction of subsidy payment in the power sector was recently initiated by the federal government to protect vulnerable Nigerians who are already experiencing the effects of soaring inflation due to fuel subsidy removal and the collapse of the foreign exchange (FX) market.

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