Electricity customers on Band A feeders may face a tariff increase due to the rising electricity tariff shortfall, or subsidy.

The Federal Government’s electricity subsidy rose from N102.30bn in May to N181.63bn in September.

In April, the Nigerian Electricity Regulatory Commission removed subsidies for Band A feeders, which had a N140.7bn subsidy.

This change raised tariffs to N225/kWh for Band A customers, who receive at least 20 hours of electricity daily.

The decision sparked outrage among Nigerians, including labour unions and education and health institutions, whose electricity bills tripled.

When the subsidy dropped to N102.30bn in May, the government lowered the Band A tariff to N206.80/kWh. However, the tariff increased to N209/kWh in July as the subsidy rose to N158bn in June.

According to data released by the NERC, the subsidy rose to N163.87bn in July, N173.88bn in August, and N181.63bn in September, fuelling speculations that there may be another tariff increase in the October Multi-Year Tariff Order unless the cost of power generation drops.

It was gathered that the foreign exchange crisis has been the major driver of the electricity subsidy. The NERC put the dollar exchange rate at N1,494.1 in July; 1,564.3 in August; and N1601.5 in September.

According to the regulator, the dollar rate and inflation are the determinants of the cost of power production. In the MYTO order to all the power distribution companies for September, the NERC said, further to Section 23 of the MYTO-2024, the supplementary orders are to reflect the changes in the pass-through indices outside the control of licensees including inflation rates, naira/dollar exchange rate, available generation capacity and gas price for the determination of cost-reflective tariffs.

The naira to the US dollar exchange rate of N1,601.50 to a dollar was adopted for September.

The Nigerian inflation rate of 33.40 per cent for July 2024 as published by the National Bureau of Statistics was applied to revise the Nigerian inflation rate projection for 2024 while the US inflation rate of 2.90 percent for July 2024 was applied to revise the US Inflation rate projection for 2024.

As of September, the NERC maintains the benchmark gas-to-power price of $2.42/MMBTU based on the established benchmark price of gas-to-power by the Nigerian Midstream and Downstream Petroleum Regulatory Authority in line with Section 167 of the Petroleum Industry Act 2021.

The cost of power generation is also being impacted by contracted gas supply and transportation prices outside the domestic gas delivery obligation quantities based on effective gas sale agreements approved by the commission.

When the commission reduced the Band A tariff to N206/KWh in May, its spokesperson, Usman Arabi, said that the reduction was due to the naira appreciation in the foreign exchange market.

It was observed that despite the rise in the cost of power generation, the Federal Government has yet to approve another tariff hike, perhaps due to the current economic hardship in the country, especially with the rise in the cost of premium motor spirit otherwise known as petrol.

For example, in the Abuja Electricity Distribution Company, the commission said the energy delivered was 611 megawatt-hours per hour in April.

The same was delivered from May to September. While the generation cost was N103.9 per kilowatt-hour in April, it dropped to N87.33/KWh in May and rose to N113.69/KWh in September.

The AEDC had a transmission and admin cost of N9.1/kWh in April, N8.9/kWh in May and N9.8/kWh in June. It is N10.4 in September.

It was gathered from the NERC data that the end-user cost-reflective tariff in AEDC was N185/kWh in July; N192.2/kWh in August and N195.5/kWh in September.

Similarly, the end-user allowed tariff was N117.31/kWh in the three months, indicating that despite the rise in the cost of power generation, the NERC pegged the allowed tariffs at the same rate in July, August, and September.

However, it was gathered that the Discos are already complaining over the non-cost-reflective tariffs.

Some of them are currently refusing to off-take electricity allocated to them from the grid, demanding that subsidies be removed in all bands.

A top official of one of the Discos had said that the power companies were finding it difficult to pick the extra energy produced by generation companies because they were not happy with the tariff on other bands apart from Band A.

“As it is now, we are operating at a loss. Yes, they supply more power but this problem could be solved with improved tariff for the other bands and more meter penetration to recover the cost,” the Disco official, who pleaded not to be named due to lack of authorisation to speak on the matter, said.

The Minister of Power, Adebayo Adelabu, recently decried the rejection of power by electricity distribution companies, describing it as regrettable.

According to the minister, generation peaked above 5,000 megawatts recently, but “unfortunately, it had to be ramped down by 1,400MW due to the inability of the Discos to pick the supply.”

Adelabu lamented the development, saying “This is really regrettable considering that the government is on course to increase generation to 6,000MW by the end of the year.”

Adelabu called on power distribution companies to take more energy to prevent grid collapse as the grid’s frequency drops when power is produced and not picked by the Discos.

Credit: The Punch

Godwin Obaseki, the governor of Edo, has urged residents to remain peaceful and avoid destructive tendencies following the gubernatorial election’s outcome.

The Independent National Electoral Commission (INEC) announced Monday Okpebholo, the All Progressives Congress (APC) candidate, as the winner of the September 21 election.

Okpebholo, a serving senator, won the election with 291,667 votes to defeat his closest challenger, Asue Ighodalo, candidate of the Peoples Democratic Party (PDP), who got 247,274 votes.

Olumide Akpata, candidate of the Labour Party (LP), came a distant third with 22, 763 votes.

The APC won the election in 11 of the 18 LGAs in Edo, while the PDP secured victories in the remaining seven LGAs.

In a broadcast to residents, Obaseki called for calm, saying those who feel aggrieved should follow due process by challenging the outcome in court.

“The attractive thing about democracy is the power it bestows on the people to choose who governs them. Therefore, when this power is blatantly seized from the people, it is not just a tragedy, but a travesty of democracy,” the governor said.

“Regrettably, the outcome of the September 21 governorship election appears to have daunted the spirit of many Edo people who feel powerless in the face of brute force of the institutions that are supposed to protect them.

“It is, therefore, understandable that many people feel sad and aggrieved. But in the midst of this despair, I am urging all my fellow Edo citizens to maintain calm and not resort to violence and destruction of property in spite of this provocation.

“Peace and justice will always win at the end and this is my prescription for all the good people of Edo state who feel vexed about and violated at this time.

“Clearly, it is obvious to the least discerning the amount of impunity and disregard for process and law that was displayed in this gubernatorial election.

“In a democracy, there are always safeguards for addressing grievances and we hope that all those affected will seek resolution for this blatant disregard for law and process.”

The governor asked residents to go about their lawful businesses, adding that the government is committed to their well-being and security.

President Bola Tinubu has instructed security and law enforcement agencies to step up efforts against cybercriminals and transnational car thieves operating in Nigeria.

This directive is part of the government’s broader commitment to dismantling organized crime networks involved in illicit activities, particularly those targeting foreign nationals.

Tinubu praised the Economic and Financial Crimes Commission (EFCC) for its successful collaboration with Canadian authorities, which resulted in the recovery of $180,000 and 53 vehicles.

These recovered assets were handed over to the Royal Canadian Mounted Police (RCMP) on behalf of two Canadian citizens.

“Nigeria is not a destination for stolen vehicles and a haven for illicit wealth from foreign countries,” Tinubu said.

He emphasised that his administration will remain relentless in tackling financial crimes, cybercrime, and money laundering.

He stressed that the most effective way to weaken organised crime is by depriving criminals of the proceeds from their illegal activities.

The president also expressed concern over the involvement of transnational organised criminal groups in the export of stolen vehicles into Nigeria.

He urged law enforcement agencies, particularly the EFCC, the Nigeria Customs Service (NCS), the Nigeria Police Force (NPF), and the Nigerian Ports Authority (NPA), to step up their vigilance and work together to intercept these criminal networks.

He noted that seized and confiscated assets, especially moveable property like vehicles, should be preserved for the benefit of the state, society, and victims in accordance with existing legislation and international conventions.

“Criminals must not benefit from their illicit activities,” Tinubu said, adding that Nigeria is committed to maintaining strong relationships with international partners to ensure that criminals who operate across borders are brought to justice.