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Federal Government to Extend Electricity Subsidy Amid Economic Challenges, Confirms NERC Chairman

Federal Government to Extend Electricity Subsidy Amid Economic Challenges, Confirms NERC Chairman

In a press conference held in Abuja on Wednesday, Mr. Sanusi Garba, the Chairman of the Nigerian Electricity Regulatory Commission (NERC), declared the government’s ongoing commitment to subsidizing electricity to alleviate financial hardships faced by Nigerians amidst economic difficulties.

Garba stated, “Government has decided, for now, arising from the cost-of-living crisis and other challenges, to continue subsidizing electricity.” He emphasized that the recently published tariff order by the commission does not propose an increase in tariffs but outlines the charges permitted for Electricity Distribution Companies (DisCos).

“In the tariff order, you will also see the amount of subsidy the government will be providing to cover the gap between what DisCos will charge and what they are allowed to charge,” Garba added.

The updated tariff aims to align with government policy, ensuring that DisCos can sustain their operations while meeting financial obligations. Garba highlighted opportunities for states created by the 2023 Electricity Act, allowing them to enact laws and take responsibility for electricity delivery within their franchise areas.

Acknowledging the financial challenges faced by DisCos in metering customers, Garba noted the negative impact on the metering rate due to difficulties in securing capital from banks. He reassured the commission’s commitment to collaborating with states and maintaining public utilities to provide essential services to Nigerians.

Despite recent indications from DisCos about potential tariff increases, the National Assembly has rejected such proposals, citing the already high cost of living. With the inflation rate reaching 28.92% in December 2023 – the highest in 27 years – further electricity tariff hikes are feared to worsen the existing cost-of-living crisis across the country.

This Article is Fact-Checked. See Policy.

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