The Nigerian government may introduce another electricity tariff hike in October 2024, as the country’s power subsidy continues to rise, reaching ₦181.63 billion in September 2024.
This marks a significant increase from ₦102.30 billion in May, with the government paying ₦163.87 billion in July, ₦173.88 billion in August, and ₦181.63 billion in September.
This potential hike comes after the Nigerian Electricity Regulatory Commission (NERC) removed subsidies for areas with Band A feeders in April 2024, leading to an initial tariff increase to ₦225 per kilowatt-hour for consumers receiving at least 20 hours of electricity daily.
This sparked public outcry as many saw their bills triple. Following this, the tariff was reduced to ₦206.80/kWh in May, but was raised again to ₦209/kWh in July due to the fluctuating exchange rate and rising subsidies.
The dollar-to-naira exchange rate, a key factor in tariff adjustments, increased from ₦1,494.1 in July to ₦1,601.5 in September.
With the cost of gas-to-power remaining at $2.42/MMBTU, these rising costs, combined with Nigeria’s inflation rate of 32.15 percent in August 2024, suggest that another tariff hike may occur in October unless power generation costs decrease.
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