Monthly power subsidy soars by 151% to #211bn

By Abass Ganiyu
By Bolanle Esther Feranmi 

The electricity subsidy obligation of the Federal Government rose from N252.76bn to N633.30bn in the first quarter of 2024, a report by the Nigerian Electricity Regulatory Commission has disclosed.

The NERC said the electricity subsidy skyrocketed to N211.10bn per month in the first three months of 2024, from N84.25bn in the last quarter of 2023.

NERC revealed that the increase was largely attributable to the government’s policy to harmonise the exchange rates while also issuing a policy directive that end-user customer tariffs remain at the rates that came into effect in December 2022.

“Due to the absence of cost-reflective tariffs across all distribution companies, the government incurred a subsidy obligation of N633.30bn (90.57 per cent of total Nigerian Bulk Electricity Trading Plc invoice) in Q1 2024 (average of N211.10bn per month). Across 2024/Q1, this represents an increase of N380.56bn (150.56 per cent) compared to the N252.76bn (average of N84.25bn per month) incurred in Q4 2023,” the regulator stated.

The absence of cost-reflective tariffs was said to have caused the Federal Government to undertake to cover the resultant gap between the cost-reflective and allowed tariff in the form of tariff subsidies.

For ease of administration, the subsidy is only applied to the generation cost payable by Discos to NBET at source in the form of Disco’s Remittance Obligation.

The DRO, it was learnt, represents the total Genco invoice that is billed to the Discos by NBET based on what the allowed Disco tariffs can cover.

Comments

Post a Comment

Popular posts from this blog

FG votes #2tn for Lagos, calabar, others

By Abass Ganiyu
Image
By Bolanle Esther Feranmi   The National Assembly has passed the N2tn budget amendment bill for the third reading, as the Federal Government is to spend about N2tn on the Lagos-Calabar highway and other road projects. The bill was passed after the Chairman of the Senate Committee on Appropriation, Olamilekan Adeola (APC, Ogun West), presented his committee’s report on the 2024 Appropriation (Amendment) Bill. On July 17, 2024, President Bola Tinubu transmitted to the Senate a bill for an Act to amend the Appropriation Act, 2024 to provide for the sum of N6.2tn with N3.2tn for capital expenditure and N3tn for recurrent expenditure. The document showed that N700bn would be used for the country’s coastal road that would run from Lagos to Calabar, traversing Lagos, Ogun, Ondo, Delta, Bayelsa, Port Harcourt, Akwa Ibom, and Cross River states. The Port-Harcourt to Maiduguri railway line would gulp N530bn, as the line would pass through Abia, Enugu, Ebonyi, Anambra, Benue,...
Read more

Banks and Businesses Shut Down as Hunger Protest Escalates

By Abass Ganiyu
Image
By Feranmi Bolanle Lagos, Nigeria – 1st August, 2024: In a significant display of civil unrest, banks and various businesses across major Nigerian cities were forced to shut down today as a widespread hunger protest intensified. The demonstration, organized by grassroots groups and activists, is drawing attention to escalating food insecurity and economic hardships affecting millions of Nigerians. The protest, which began early this morning, saw thousands of demonstrators taking to the streets to voice their frustrations over soaring food prices and inadequate government responses. Major financial institutions and retail outlets, including several prominent banks, were compelled to close their doors as protestors converged on key business districts. The shutdown of banks and businesses has caused significant disruptions in daily economic activities. Many customers were left stranded, unable to access banking services or conduct transactions. The protestors' demands incl...
Read more