OVERVIEW OF: Federal Government Increases Electricity Tariffs Again
The Federal Government of Nigeria has again increased the electricity tariff payable by power consumers across the country.
The Nigerian Electricity Regulatory Commission approved the price hike saying the increase varies based on different consumer classes and took effect from January 1, 2021.
The tariff increase is taking effect just two months after the government through NERC implemented a hike in November 2020, which resulted in outcry from the masses and the Labour Unions.
The MYTO order containing the latest tariff hike, Order NERC/225/2020, was signed by the new Chairman of NERC, Sanusi Garba, and it supersedes the previous Order NERC/2028/2020.
Providing reasons for the latest tariff hike, the commission said it considered the 14.9 per cent inflation rate rise in November 2020 and foreign exchange of N379.4/$1 as of December 29, 2020.
Other reasons include the available generation capacity, the United States inflation rate of 1.22 per cent and the Capital Expenditure of the power firms before the tariff was raised.
Unlike the price hike of November 2020, this new hike includes low electricity consumers.
The NERC also stated that the new tariff would be effective till June 2021 while a Cost Reflective Tariff would be activated from June to December 2021.