Despite the increase in rates for Tranche A customers in April 2024, Nigeria committed an electricity subsidy of N464.12 billion in the third quarter of 2024. This is equivalent to an increase of 84.06 billion naira compared to the 380.06 billion naira

The evolution of the 54.71 percent subsidy on total utility bills (GenCos) over the period, according to the Nigeria Electricity Regulatory Commission (NERC).

The latest quarterly report from the Nigeria Electricity Regulatory Commission (NERC) revealed that the increase in subsidy payments is attributed to the absence of tariffs that reflect costs in all distribution companies (DisCoS) and to the federal government's policy of freezing authorized tariffs. paid by customers despite increased rates reflecting costs

It is important to note that due to the absence of rates that reflect costs in all DisCoS, the government had to pay a subsidy of 464.12 billion naira. Between the second quarter of 2024 and the third quarter of 2024, the government's subsidy obligation increased by 84.06 billion naira, compared to 380.06 billion naira

“The increase in the federal government's subsidy requirement is a result of the federal government's policy to freeze authorized rates paid by customers despite increasing rates that reflect costs,” the report adds.

Yusuf Ali, Commissioner for Planning, Research and Strategy at NERC, noted during a presentation at PwC's annual electricity and utilities roundtable in Lagos that without the tariff reforms implemented between 2020 and 2023, subsidies would have increased further, especially in the context of macroeconomic challenges savings over the last 20 months