The Nigerian Electricity Regulatory Commission (NERC) has disclosed that the Federal Government subsidized electricity consumption by Nigerians with N2.8 trillion from 2015 to 2022.
The commission gave these figures in its July 2023 report titled ‘Overview of the Nigeria Electricity Supply Industry’.
According to the NERC the subsidy payment for the first months of this year totaled N57 billion.
It stated that the subsidy from January-April this year would have been higher but that the Service-Based Tariff scheme helped in reducing it.
In what appears a move by the commission to justify the proposed tariff adjustment by the electricity distribution companies’ (DisCos) to further hike electricity tariffs, the NERC maintained the past upward review of electricity tariffs by the DisCos saved Government from paying additional N1 trillion subsidy annually.
It further clarified that “between January 2020 and January 2023, tariff increased from 55 per cent of cost recovery to 94 per cent.
“Without the tariff reviews that commenced in 2019, subsidies payable by the government would have grown to about N1 trillion per annum by 2023. Service-Based Tariff was instrumental in the transition to cost-reflective levels
“Annual subsidy reduced from N528 billion in 2019 to N144 billion in 2022. Subsidy in 2023 year-to-date (January to April 2023) stood at N57 billion.
“Service-Based Tariff was instrumental to the reduction of tariff subsidy. The financial burden of tariff subsidies between 2015 and 2022 stood at NGN2.8 trillion”, it added.
Following recent moves by the DisCos to review the electricity tariffs upward, the NERC had last weekend specifically charged interested stakeholders to review and take into consideration the excerpts of the Rate Review Applications filed with the Commission by the respective licensees which, it stated, could be accessed on its website.
It hinted of its plan to conduct a rate case hearing and extends participation to members of the public who are interested prior to making a rule in the exercise of the powers conferred on it by the Electricity Act.
The NERC further advised that “any person wishing to participate in the proceedings as an intervenor should forward his/her application to it through a specified email address before the close of business on 20th July 2023.
