According to NERC, the Nigerian Electricity Regulatory Commission, the total amount of electricity subsidies for 2024 could reach N2.4 trillion.
PricewaterhouseCoopers’ (PwC) annual electricity and utilities roundtable in Lagos featured remarks from Yusuf Alli, the NERC’s commissioner of planning, research, and strategy, on Thursday.
Foreign exchange issues and tariff modifications caused fluctuations in the subsidies, according to Alli.
“The electricity subsidy amount was N1.9 trillion as of November, but based on current trends, it is anticipated that the monthly subsidy will reach N260 billion in December,” he stated.
He said that the band A tariff was lowered by more than N100 billion when the step to raise it was taken in April.
But regrettably, the macroeconomic climate has regressed to some extent.
The best estimate we currently have for 2024 is that the total amount of subsidies would be N2.4 trillion.
The Ministry of Finance, the federal government, would have to find the funds to compensate the generating firms, as they are now the ones who are not receiving their full share of the money due to the deficits.
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A 40% decrease from the N633.3 billion spent in Q1 2024, the NERC’s quarterly report for Q2 2024 said that the federal government’s electricity subsidy obligation was N380 billion.
An increase in electricity rates for Band A consumers was approved by the commission on April 3 in an effort to cut down on federal spending on electricity subsidies.
The agency stated that consumers who fall within this category and receive 20 hours of power supply per day will now pay N225 per kW instead of N66.
Electricity subsidies for the 2024 fiscal year would be cut by around N1.14 trillion under the authorized pricing, according to the NERC.
