The Federal Government, on Monday, announced that it was currently reviewing the implementation process for a cost reflective electricity tariff, but stated that it would continue to subsidise power supply for vulnerable citizens in Nigeria.
It also announced that it would unbundle the Transmission Company of Nigeria by separating Transmission services from System and Market operations in the first quarter of this year.
The Minister of Power, Chief Adebayo Adelabu, who announced this in a statement issued by the Federal Ministry of Power in Abuja, further stated that in the medium to long-term, Nigeria’s power transmission grid would be separated into regional grids to enable effective management.
On Monday, power distribution companies denied reports of electricity tariff hike beginning from January 1, 2024, stressing that the Nigerian Electricity Regulatory Commission had not issued any directive for such.
Their denial was due to an earlier report that power distribution companies were planning to hike electricity tariff from January 1, 2024, a development that was neither confirmed by the NERC nor the Federal Ministry of Power.
But in the statement from the FMP on Monday, the minister was quoted to have stated that the process for the implementation of a cost reflective tariff was ongoing.
Power tariffs are normally reviewed every six months to reflect the economic realities across the country, considering inflation, cost of gas required to fire most power plants, among others.
The power subsidy figures obtained in Abuja from the Nigerian Electricity Regulatory Commission, an agency of the Federal Government, showed that the government subsidised electricity in the first, second and third quarters of 2023.
The report stated that in the first quarter of this year, the Federal Government subsidised power by N36bn, this increased to N135.2bn in the second quarter, and jumped to N204.6bn in the third quarter. Figures for the fourth quarter are not ready yet.
Providing reasons for the subsidy in the third-quarter 2023 report, the NERC stated that it was due to the absence of cost-reflective tariffs.
