Consumers to Pay More as FG Okays 194% Increase in Electricity Rate per Kilowatt-Hour

Plans to eliminate 15% of customers’ power subsidies have been made public by the federal government.

According to President’s Special Advisor on Information and Strategy, Bayo Onanuga, the action will save the government almost N1.1 trillion yearly and cut its cost by N3.3 trillion, as reported by Reuters on Tuesday.

Onanuga stated that considering its N450 billion budget for energy subsidies in 2024, the Bola Tinubu-led administration was ready to approve the increase in power prices.

In light of this, electricity distribution firms would be permitted to raise rates for urban users in April from N68 to N200 per kilowatt-hour, the presidential adviser said in a separate interview with Bloomberg.

He clarified that the country had last revised power pricing in 2020 and that Discos would be able to boost investments and recoup expenses with the proposed hike. “The current electricity tariff is not realistic with the huge burden of subsidies and the high cost of gas,” he told Reuters.
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Verifying this, Onanuga stated that just 15% of customers—or 40% of the total—would be impacted by the pricing increase.

He said the FG would help power generating companies to offset about N1.5tn debts they owe the country’s bulk electricity buyer.⁣ [CONTINUE READING HERE]