The Federal Government’s electricity subsidies reached ₦199.64 billion in December 2024, reflecting a 2.76% increase from the ₦194.26 billion paid in November.
This data was revealed in the Nigerian Electricity Regulatory Commission report titled “December 2024 Multi-Year Tariff Order.”
NERC attributed the rise to factors such as the exchange rate, inflation, and power generation capacity. The report stated that the exchange rate had climbed to ₦1,687.45 per dollar, with inflation reaching 33.9%.
Despite these challenges, electricity tariffs across all customer categories remained unchanged. Band-A customers continue to pay ₦209 per kilowatt-hour (kWh), while tariffs for Bands B to E remain frozen at rates set in December 2022.
According to the report, the Federal Government will pay ₦29.10 billion in subsidies for customers under Abuja Electricity Distribution Company, up from ₦27.86 billion in November. Consumers served by Ikeja Electric will receive ₦26.68 billion in subsidies this month.
NERC also retained the wholesale gas-to-power price at $2.42/MMBTU, as set by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
The Commission explained that the approved tariffs will remain subject to monthly adjustments based on inflation, the exchange rate, and gas-to-power prices.
This development follows the Federal Government’s removal of petrol subsidies in May 2023, which caused fuel prices to rise significantly—from around ₦189 per litre to over ₦1,300 per litre.
The continued subsidies for electricity have drawn mixed reactions. A Lagos resident, Tunde Adebayo, remarked, “While it’s good that tariffs are frozen for most customers, we hope the government can sustain this subsidy without affecting other sectors.”
Critics have called for better strategies to address Nigeria’s energy sector challenges. Energy analyst Grace Oladipo noted, “Subsidies are only a temporary solution. The government needs to focus on improving electricity generation and distribution to reduce reliance on subsidies.”
