HomeIndustry SectorsFinance and PolicyNigeria: Confusion about the latest electricity tariffs increase

Nigeria: Confusion about the latest electricity tariffs increase

The Nigerian Electricity Regulatory Commission (NERC) has issued a media statement directing local media to withdraw reports about the approved 50% increase in nationwide electricity tariffs. 

On 31 December 2020, NERC Chairman Sanusi Garba signed an order (NERC/225/2020) for electricity distribution companies to increase tariffs, effective from January 1.

Following this order, several local media reported this would increase the electricity tariffs nationwide by 50% compared to tariffs agreed in October 2020. However, according to NERC’s latest media statement, this is not the case.

“The Commission [NERC] 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,” reads part of the media statement.

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On the contrary, says the Commission: “The tariff for customers on service bands D & E (customers being served less than an average of 12hrs of supply per day over a period of one month) remains frozen and subsidised in line with the policy direction of the Federal Government.

“In compliance with the provisions of the Electric Power Sector Reform Act (EPRSA) and the nation’s tariff methodology for biannual minor review, the rates for service bands A, B, C, D and E have been adjusted by NGN2.00 to NGN4.00 per kWhr to reflect the partial impact of inflation and movement in foreign exchange rates,” reads the statement.

According to local news website Nairametrics, the recent increase in tariffs follows a suspension of an earlier order issued in August 2020 for the increase in tariffs with effect September 1, 2020.

However, a threat by Labour to go on a nationwide strike forced the government to suspend the tariffs for two weeks ending October 15th, 2020.

To this end, the Federal Government and the organised Labour then agreed to provide a tariff relief of N10.20 per kilowatt-hour for Nigerians for a period of three months.

While the NERC statement confirms that the tariff has been increased, it explains that prices have not been hiked by 50% as stated by media sources.

The Commission urged customers that have been impacted by any rate increases beyond the above provision of the tariff order to report to the Commission at complaints@nerc.gov.ng.

On Thursday 7 January, the Minister of Power, Sale Mammam, responded on Twitter to NERC’s statement and affirmed that the claims of a 50% increase in the tariffs were false. He added that “it is unfortunate that these reports have led to confusion within the public”.

In response, Mamman asked NERC to inform all Electricity Distribution Companies to revert to tariffs that were applicable in December 2020:

“To promote a constructive conclusion of the dialogue with the Labour Centers (through the Joint Ad-Hoc Committee), I have directed NERC to forestall the implementation of the duly performed minor review (which adjusted tariffs between N2 per kWh and N4 per kWh) until the conclusion of the Joint Ad Hoc Committee’s work at the end of January 2021.”

Babalwa Bungane
Babalwa Bungane is the content producer for ESI Africa - Clarion Events Africa. Babalwa has been writing for the publication for over five years. She also contributes to sister publications; Smart Energy International and Power Engineering International. Babalwa is a social media enthusiast.