NERC: New Tariff to Cut 2024 Subsidies by ₦1.4 Trillion

The Nigerian Electricity Regulatory Commission (NERC) has announced that the newly approved tariff is anticipated to reduce subsidies for the 2024 fiscal year by approximately N1.14 trillion. Mr. Musliu Oseni, the Vice Chairman of NERC, made this declaration in a statement released in Abuja on Wednesday. He emphasized that this adjustment aligns with the Federal Government’s objective of repositioning the subsidy regime towards a more targeted approach to address changes in macroeconomic parameters while safeguarding vulnerable customers and promoting investments for enhanced service delivery in the Nigerian Electricity Supply Industry (NESI).

Oseni explained that NERC conducted a comprehensive review of tariff applications submitted by the 11 Electricity Distribution Companies (DisCos) according to established regulations and business rules. This review process included an analysis of performance improvement plans, public hearings for stakeholder input, and a thorough examination of rate filings by public utilities.

Under the revised tariff order issued by NERC, only customers classified under the Band Serv category, comprising approximately 15% of the customer population, will be affected by the approved tariff adjustments. Oseni highlighted that this decision was informed by empirical service data confirming that this customer class has consistently received a committed level of service. Additionally, DisCos is mandated to ensure a minimum average supply of 20 hours per day for customers classified under the B and A service categories.

NERC has established a robust monitoring framework leveraging technology to ensure transparency and accountability in service delivery. Furthermore, an enforcement and compensation mechanism has been put in place to address instances of service failure. Oseni assured Nigerians of NERC’s commitment to providing adequate and reliable electricity to all citizens while collaborating with policymakers and state governments to realize the objectives outlined in the Electricity Act 2023.