Electricity distribution companies in Nigeria have announced a reduction in the tariff for customers under Band A classification to N206.80 per kilowatt-hour (kwh).
On April 3, the Nigerian Electricity Regulatory Commission (NERC) approved an increase in the electricity tariff for customers under the Band A category to N225 per kwh, up from N66.
The commission said customers under the classification are those who receive 20 hours of electricity supply daily.
Announcing the slash in a circular on Monday, Ikeja Electricity Distribution Company (IKEDC) said the new tariff regime would take effect on May 6, 2024.
“Please be informed of the downward tariff review of our Band A feeders from N225/kwh to N206.80/kwh effective May 6, 2024, with guaranteed availability of 20-24hrs supply daily,” the circular reads.
However, the DisCo said the tariffs for bands B,C,D and E are unchanged.
On April 4, NERC said the approved tariff increase is expected to reduce subsidy for the 2024 fiscal year by about N1.14 trillion.
“With the newly approved tariffs, subsidies for the 2024 fiscal year are expected to reduce by about NGN1.14 trillion in furtherance of the federal government’s realignment of the subsidy regime,” NERC said.
Musliu Oseni, vice-chairman of the commission, said the new tariff will bolster the nation’s economy.
In a statement on Monday, Sani Sani, head of corporate communications, Kano DisCo, said the downward review of the tariff followed an order by NERC.
“Further to section 23 of the MYTO 2024, which took effect on January 1, 2024, and the subsequent April 2024 Supplementary Order, which saw an increase in the Band A tariffs, the May Supplementary Order seeks to reflect the changes in the pass-through indices outside the control of licensees, including inflation rate, NGN/USD exchange rate, available generation capacity, and gas price for the determination of Cost-Reflective Tariffs,” the statement reads
“In line with the Federal Government of Nigeria’s policy direction on electricity subsidy, only Band A customer categories are affected by the minor review, and Band B-E customer categories shall remain frozen at the rates payable since December 2022, subject to further policy direction by the Government.”
Sani said the newly approved tariffs would remain in force and would be subject to “monthly adjustments of pass-through indices, including inflation rates, NGN/USD exchange rates, and gas-to-power prices”.
Reacting to the development, Abubakar Yusuf, KEDCO’s managing director, welcomed the tariff adjustment as a sign of the regulator’s commitment to sustainable power sector growth.
He reiterated the firm’s commitment to continuous service delivery improvement as agreed under service-based tariff (SBT) proposals.
On its part, Kaduna DisCo said the review affects both prepaid and postpaid customers.
The DisCo assured customers on its Band A feeders “of continued availability of 20-24hrs supply daily as stipulated in the Service Based Tariff regime”.
Also, announcing the tariff review in a statement on Monday, the Port Harcourt DisCo said “the guaranteed availability of a minimum of 20 hours per day still stands”.
