By Mohammed Bello Doka
In a landmark decision aimed at restructuring Nigeria's electricity market, the Nigerian Electricity Regulatory Commission (NERC) has greenlit a tariff hike for Band A customers, marking the end of a subsidy era. Effective immediately, customers enjoying 20 hours of daily electricity under Band A classification will witness a significant tariff surge from the previous rate of N66 to N225 per kilowatt-hour.
The move, announced during a press briefing in Abuja by NERC's Vice Chairman, Musliu Oseni, impacts approximately 15 percent of the nation's 12 million electricity consumers. Additionally, certain customers have been downgraded from Band A to Band B due to non-compliance with required electricity supply hours, signifying a stricter adherence to classification criteria.
NERC's decision to revise tariffs comes in response to the burgeoning costs of subsidizing electricity prices, which amounted to approximately $2.3 billion annually. Bloomberg reports indicate that this strategic shift aims to attract new investments while fostering long-term sustainability and efficiency within the Nigerian power sector.
Simultaneously, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recently announced an upward adjustment in the price of natural gas, the primary fuel source for over 70% of Nigeria's electricity generation. This coordinated effort in energy pricing underscores the government's commitment to reforming the energy sector and ensuring a balanced and self-sustaining market structure.
As Nigeria embarks on this transformative journey, stakeholders anticipate both challenges and opportunities, recognizing the necessity of these measures in achieving a resilient and robust energy landscape for the nation's future prosperity.
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