The Nigerian Electricity Regulatory Commission (NERC) says the new tariff hike is expected to reduce funds spent on subsidy by about N1.14 trillion for the 2024 fiscal year.
Musliu Oseni, the vice-chairman of NERC, said this in a statement on Wednesday.
”With the newly approved tariffs, subsidies for the 2024 fiscal year are expected to reduce by about N1.14 trillion in furtherance of the federal government’s realignment of the subsidy regime,” he said.
Mr Oseni said the federal government had indicated a transition in policy direction towards introducing a more targeted subsidy regime aimed at mitigating the impact of changes in macroeconomic parameters.
He said, “While largely protecting vulnerable customers and fostering investments targeted at providing efficient service delivery in the Nigerian Electricity Supply Industry (NESI).”
According to him, the commission thoroughly reviewed the tariff applications submitted by the 11 electricity distribution companies (DisCos) in line with the processes established in its regulations and business rules.
He said that the review process was preceded by an analysis of the licensee’s performance improvement plans and included a public hearing during which interested stakeholders and intervenors examined the rate filing submitted by the public utilities.
Mr Oseni said empirical service data had confirmed that this class of customers had truly received a committed level of service.
He said that under the revised tariff order issued by the NERC, DisCos was under an obligation to provide customers classified under the Band A service category with a minimum average supply of 20 hours a day, which was measured over one week.
Mr Oseni said that an enforcement and compensation mechanism had also been established in the event of service failure.
”We wish to assure all Nigerians that the commission working in collaboration with the policymakers remains committed towards providing adequate and reliable electricity to all citizens.
”This is as we work diligently with state governments to deliver on the gains of the Electricity Act 2023,” he said.
(NAN)
