FG Allocates N199 Billion for Electricity Subsidy in December, Reports NERC

NERC Reveals FG’s N199 Billion Subsidy for Nigerian Electricity in December

The Nigerian Electricity Regulatory Commission (NERC) has reported that the Federal Government’s electricity subsidy payments increased to ₦199.64 billion in December 2024, up from ₦194.26 billion in November.

Key Factors Influencing the Increase:

• Exchange Rate: The exchange rate was pegged at ₦1,687.45 to the U.S. dollar.
• Inflation Rate: Inflation rose to 33.9%.
• Generation Capacity: Adjustments in available power generation capacity also contributed to the subsidy increase.

Tariff Details:

• Band A Customers: Continued to pay ₦209 per kWh.
• Bands B to E Customers: Tariffs remained frozen at December 2022 rates.

Subsidy Allocation by Distribution Company:

• Abuja Electricity Distribution Company: Consumers are expected to receive ₦29.10 billion in subsidies, up from ₦27.86 billion in November.
• Ikeja Electric: Consumers are allocated ₦26.68 billion in subsidies.

NERC has indicated that these tariffs are subject to monthly adjustments based on key economic indicators, including inflation rates, exchange rates, and gas-to-power prices.

The cumulative electricity subsidy for 2024 is projected to reach approximately ₦2.4 trillion by year-end.