SECTOR INSIGHT 18/01/2024
NERC Reassures FG’s Commitment in Continuing Electricity Subsidy
It has been revealed by Mr Sanusi Garba, the Chairman of the Nigerian Electricity Regulatory Commission (NERC), that the Federal Government intends to persist with subsidizing electricity. This decision has been made in order to alleviate the financial strain on Nigerians, which has been exacerbated by the economic hardships in the country.
During a news conference in Abuja on Wednesday, Garba disclosed, “Government has decided for now, arising from the cost of living crisis and so many others, to in the meantime continue to subsidize electricity.” He also highlighted that the new tariff order recently published by the commission indicates that the tariff will not be increased, but it outlines the amount that the Electricity Distribution Companies (DisCos) should be charging.
Garba further noted, “You will also see in the tariff order the amount of subsidy the government will be providing to cover the gap between what they will charge and what they are allowed to charge.” He emphasized that the new tariff incorporates what the DisCos are permitted to charge based on government policy, in order for them to continue providing their services.
Addressing the issue of payment obligations for the DisCos, he stated, “The DisCos are in the business of buying electricity from the Nigeria Bulk Electricity Trading Company (NBET), so they are to pay.”
Mr Garba highlighted the significance of the Electricity Act signed by President Bola Tinubu in 2023, emphasizing that it has created an opportunity for states to enact laws and assume responsibility for providing electricity in their respective franchise areas.
He further affirmed the commission’s commitment to collaborating with the states, aiming to ensure the proper utilization of existing public utilities to offer services to Nigerians as originally intended. On the matter of metering, the chairman acknowledged the financial challenges faced by the Electricity Distribution Companies in deploying meters to their customers.