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Nigeria raises electricity prices for biggest users - NERC

Published 05/01/2021, 16:33
Updated 05/01/2021, 16:36
© Reuters.

ABUJA, Jan 5 (Reuters) - Nigeria's electricity regulator has
increased prices for top-band customers to reflect the impact of
inflation and a weakening naira, the regulator said on Tuesday.
Prices for customers in bands A, B and C - commercial and
high-use residential users - will rise by 2 naira to 4 naira per
kilowatt hour, the Nigerian Electricity Regulator Commission
said in a statement. The baseline rate, raised late last year,
varies by customer but is around 24 naira per kilowatt hour.
Artificially low tariffs have made it difficult to attract
investment into the troubled sector, which is beset by problems
at all levels - from generators to distribution companies - and
provides limited and unreliable power supply. Tariffs for customers getting less than an average of 12
hours of electricity per day, bands D and E, were "frozen and
subsidised" in line with government policy, the statement said.
Groups such as the World Bank have long pressed Nigeria to
make state-controlled electricity prices cost reflective.
Efforts to increase tariffs last year were temporarily
delayed due to strike threats from labour unions. Joachim MacEbong a senior analyst with SBM Intelligence,
said the government knows it must increase the tariffs, and is
trying to shield poorer Nigerians from higher prices they can
ill-afford. But increases segregated by band could prove
complicated for distribution companies, known as DISCOS, which
do not necessarily know which customers fall into each band.
"It will be a very uneven, complicated process for DISCOS to
collect some of these revenues," MacEbong said.

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