NEWS
Nigeria’s Electricity Subsidy Falls by 40% in Q2 2024 Amid Tariff Review
The Nigerian Electricity Regulatory Commission (NERC) has reported a significant reduction in the federal government’s electricity subsidy obligation, which amounted to ₦380 billion in the second quarter (Q2) of 2024.
This marks a 40 percent decline, or ₦253.24 billion, compared to the ₦633.3 billion subsidy recorded in the first quarter (Q1).
In its quarterly report released on Friday, NERC attributed the reduction to an upward adjustment of the electricity tariff for Band A customers, implemented in April.
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The commission explained that the electricity subsidy obligation had dropped from 90.57 percent of the total GenCo invoice in Q1 to 52.51 percent in Q2.
This translated to an average monthly subsidy of ₦126.69 billion for the second quarter.
“It is important to note that due to the absence of cost-reflective tariffs across all DisCos, the government incurred a subsidy obligation of ₦380.06 billion (52.51% of total NBET invoice) in 2024/Q2,” NERC said in its report.
The report highlighted that the federal government has been covering the gap between the cost-reflective and approved tariffs, providing subsidies as a result.
The subsidies are applied specifically to the generation cost payable by electricity distribution companies (DisCos) to the Nigerian Bulk Electricity Trading Plc (NBET) through a DisCo’s Remittance Obligation (DRO).
In an effort to reduce the fiscal burden, NERC approved a tariff increase on April 3 for Band A customers, who receive 20 hours of daily power supply.
The new tariff rate of ₦225 per kilowatt (kW), up from ₦66, is expected to significantly cut electricity subsidies by about ₦1.14 trillion for the 2024 fiscal year.
While the tariff increase for Band A customers has been implemented, the rates for customers in Bands B to E have remained unchanged since December 2022, as part of the government’s subsidy policy.
The reduction in the subsidy obligation represents a major shift towards more cost-reflective tariffs in Nigeria’s power sector, though significant subsidies still remain due to the tariff structure.
Former Vice-President and African Democratic Congress (ADC) presidential candidate, Atiku Abubakar, is set to address a world press conference at his residence in Abuja on Friday.
The specific reason for the media briefing has not been disclosed as of the time of filing this report.
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Atiku’s planned engagement comes amid several developments attracting public attention, including a recent report from TheCable concerning a $500,000 payment allegedly transferred in 2003 to his former wife, Jennifer Douglas, by Leno Adesanya, promoter of Sunrise Power and Transmission Company Limited.
TheCable reported that Adesanya told an international arbitration tribunal that the payment was part of a foreign-exchange transaction carried out for Atiku.
The report further stated that the payment was made through China Castle Investments Limited, an offshore company controlled by Adesanya.
The development comes shortly after an International Chamber of Commerce (ICC) tribunal ruled in favour of Nigeria in the $2.35 billion arbitration dispute brought by Sunrise Power over the Mambilla hydropower project.
The tribunal also ordered Sunrise Power and its promoter to reimburse Nigeria for a portion of its legal fees and expenses.
However, there is currently no official indication that Atiku’s scheduled press conference is connected to the Sunrise Power report, the arbitration ruling or any other specific issue.
The Federal Government has assured Nigerians that no one found culpable in the deaths of 37 suspected illegal miners who died in the custody of the Nigeria Security and Civil Defence Corps (NSCDC) in Niger State will be shielded.
Minister of Information and National Orientation, Mohammed Idris, gave the assurance in a statement released on Friday while expressing the Federal Government’s condolences to the Niger State Government, the families of the deceased and the people of the Wushishi community.
The deaths occurred following the arrest of the suspected illegal miners during enforcement operations against illegal mining activities in the Wushishi/Lukoto axis of Niger State.
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Idris said the circumstances surrounding the deaths require a thorough, transparent and impartial investigation, stressing that the government’s responsibility is to establish the facts and ensure justice is served.
The Minister of Interior, Olubunmi Tunji-Ojo, had ordered the suspension of the Niger State Commandant of the NSCDC, Suberu Siyaka Aniviye, and directed a full investigation into the incident.
“The swift action taken by the Honourable Minister of Interior underscores the seriousness with which the Federal Government views this matter,” Idris said.
He added that the investigation would be allowed to establish exactly what happened and that appropriate action would be taken based on its findings.
“There will be no attempt to shield anyone found culpable. At the same time, we mustn’t prejudge the outcome of the investigation. The Government’s responsibility is to ensure that the facts are established and that justice is served,” the minister said.
Idris stressed that while the Federal Government remains committed to combating illegal mining and other unlawful activities, enforcement operations must be conducted within the law and with respect for human life and dignity.
He appealed for calm in Wushishi and across Niger State, urging residents and other concerned parties to allow the investigation to proceed without interference.
The minister also assured the families of the deceased and the people of Niger State that the Federal Government shares in their grief and remains committed to fully establishing the circumstances surrounding the tragedy.
Minister of Interior, Olubunmi Tunji-Ojo, on Friday arrived at the Niger State Government House in Minna following the deaths of 37 suspected illegal miners in the custody of the Nigeria Security and Civil Defence Corps (NSCDC).
The minister’s visit comes as pressure mounts on authorities to explain the circumstances surrounding the deaths of the detainees.
SEE ALSO: How Can 37 Suspected Illegal Miners Die in Gov’t Custody? Nigerians Demand Answers
Tunji-Ojo is expected to meet with officials of the Niger State Government as part of his visit to the state.
He is also expected to proceed to the detention centre where the suspected illegal miners were held before their deaths.
The incident has sparked public concern and protests in Minna, with residents demanding answers over the deaths of the detainees while in government custody.
The Federal Government has ordered an investigation into the incident, while the Niger State NSCDC commandant has been suspended pending the outcome of the probe.
Details shortly…….
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