FG Increases Electricity tariff

The federal government, through the Nigerian Electricity Regulatory Commission (NERC) has approved an increase in electricity tariff by 50% across the country.

According to a directive issued on December 31, 2020, and signed by Sanusi Garba, NERC chairman, the new tariff will take effect from January 1.

The commission stated that the new tariff will be enforced until the issuance of another minor review order or an extraordinary tariff review order by the commission.

The new increment is coming barely two months after the implementation of the controversial hike proposed last year.

The new order supersedes the previous Order NERC/2028/2020.

In the new order, NERC said it considered the “…14.9% 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% and the Capital Expenditure (CAPEX) of the power firms to raise the tariff…”

Unlike the earstwhile order implemented in 2020, which exempted low power consumers, the revised Service Based Tariff (SBT) also saw increase in the rates payable by all classes of electricity users.

The order is effective till June 2021 while a Cost Reflective Tariff (CRT) expected to raise the new cost higher will be activated from June to December 2021.

Last December, NERC announced that it had begun a review of the new tariff.

Earlier in September 2020 the proposed hike was greeted by outrage among Nigerians, including labour unions.

The Nigerian government thereafter suspended the hike, amidst dialogues with stakeholders.

In November, the tariff was eventually implemented while discounts were given for sundry categories of customers.