The Nigerian Electricity Regulatory Commission (NERC) has announced that the electricity subsidy bill has risen to N180.8 billion in September, as detailed in its monthly supplementary order released on September 12. This marks an increase from N173.7 billion in August and N158.47 billion in July.

In an effort to alleviate the financial burden on the federal government, NERC approved an increase in electricity tariffs for customers classified under Band A on April 3. Customers receiving 20 hours of electricity supply daily were to pay N225 per kilowatt (kW), a significant rise from the previous rate of N66. This adjustment was anticipated to reduce subsidy payments for the 2024 fiscal year by approximately N1.14 trillion.

However, just a month after the tariff hike, distribution companies (DisCos) reduced the rate for Band A customers to N206.80 per kilowatt-hour (kWh). By July, four DisCos increased the tariff again to N209.5 kWh, reflecting the volatility in electricity pricing amid ongoing economic challenges.

The latest NERC order indicates substantial subsidy allocations to various distribution companies. The federal government is set to pay Eko Distribution Company (EKEDC) N19.92 billion, Benin Distribution Company (BEDC) N14.87 billion, and Enugu Distribution Company (EEDC) N14.61 billion. Other notable allocations include N22.21 billion for Ibadan Distribution Company (IBEDC) and N23.76 billion for Ikeja Distribution Company (IKEDC).

In light of these financial strains, Adebayo Adelabu, the Minister of Power, previously highlighted the challenges of continuing electricity subsidies, citing a staggering N3 trillion debt owed to generation and gas companies. As of August 20, N205 billion had been disbursed out of a total debt of N1.3 billion owed to generation companies (GenCos).

The rise in the electricity subsidy bill underscores the ongoing struggles within Nigeria’s energy sector and the government’s efforts to balance tariff adjustments with the need for financial sustainability.