Nigeria’s electricity distribution companies (Discos) saw a significant revenue boost of N42.4 billion following a tariff hike approved by the Nigerian Electricity Regulatory Commission (NERC) for Band ‘A’ customers on April 3.
This represents a 42.29% increase compared to March, where the tariff for premium customers rose from less than N70 to N225 per kilowatt-hour.
According to NERC data, the Discos’ total revenue in March was N100.44 billion, which surged to N142.92 billion in April 2024 after the tariff increase.
Band ‘A’ customers, making up about 15% of Nigeria’s 12 million electricity consumers (approximately 2 million people), were affected by this price hike.
NERC noted that there were initially 800 feeders categorized as Band A, but this number was reduced to under 500 after a review.
The data also showed a slight rise in collection efficiency by 0.29%, with 12 power distributors issuing bills totaling N178.72 billion and achieving a collection efficiency of 79.97%, up 0.61% from the previous month.
In April, the Discos received 2,251.22 GWh of energy and billed 1,843.08 GWh, resulting in a billing efficiency of 81.87%, a 2.56% increase from March.
According to the NERC, Ikeja Electric led in revenue collection with N29.4 billion, followed by Eko Disco with N24.93 billion, and Abuja Disco with N22.92 billion.
On the lower end, Aba Disco had a collection efficiency of 73.12% (N1.41 billion), Yola Disco collected N1.10 billion, Kaduna N5.01 billion, and Jos N6.05 billion.
Revenue recovery performance dropped to 55.82%, a 12.12% decrease from March.
NERC has stated that the new tariff is expected to reduce the subsidy for the fiscal year 2024 by about N1.14 trillion, aiming to protect vulnerable customers and encourage investments in the Nigerian Electricity Supply Industry (NESI).
NERC Vice Chairman Musliu Oseni emphasized that the new tariffs aim to create a financially sustainable electricity market that provides reliable power to drive Nigeria’s economy.
With the increased revenue, Discos are projected to exceed the N3.2 trillion collected between 2020 and 2023, with significant investments expected to improve infrastructure and power supply.
