Connect with us


BIG STORY

REPORT: Electricity Tariff Surge By 58% After N500bn Subsidy Suspension

Published

on

Research has shown that electricity tariffs increased by 58 percent after the Federal Government suspended a yearly subsidy of N500bn to the power sector.

According to The Punch, documents showed that the subsidy was removed in 2020, leading the Nigerian Electricity Regulatory Commission to equally increase tariffs from N31/kWh to N49/kWh starting from last year.

The document titled, ‘Analysis of the Commercial KPIs for ANED ́s Members/2021’, which is the latest report by the Association of Nigerian Electricity Distributors, said with the effective implementation of the Service Based Tariff in November 2020, the Federal Government removed electricity subsidies of over N500bn and “allowed tariff increase from 31 N/kWh up to 49 N/kWh in 12 months.”

Hence, electricity tariffs have increased by N18/kWh since the subsidy removal.

ANED said the new tariffs “for better service” were for customer categories under the class A, B and C.

“This fact, together with the DisCos ́ ATC&C losses recovery in 2021, disproves the paradigm that an increase in tariffs leads to an increase in losses,” the report added.

Although the DisCos and NERC have consistently denied tariff increment, findings corroborated a statement by the Minister of Finance, Budgets, and National Planning, Zainab Ahmed in March that the FG had removed all subsidies in the power sector.

Electricity consumers with prepaid meters have also lamented the reduction in electricity units received from DisCos. The DisCos had, earlier in the year, sent out-migration links to customers. Once clicked, the application link took customers to an online form where meter numbers and other information were inputted to migrate from the old tariffs to the increased tariff plans.

However, an observation of the graphical representation of tariff movement presented by the association showed that while the Nigerian Electricity Supply Industry, NESI’s cost of the service had grown from N1.15trn in 2019 up to N1.8trn in 2021 (and weighted generation cost has gone up from N23/kWh in 2019 to N27/kWh), NESI’s cost-reflective tariff in 2021 was 5 N/kWh cheaper than in 2019.

The ANED said, “It truly does not make any sense that, while the generation cost and other costs continue to grow at NESI, the cost-reflective tariff is systematically and artificially reduced.”

It, however, said despite the increment in the generation, transmission, and administrative costs, the cost-reflective tariff had been decreased mainly due to a continuous reduction in the regulated ATC&C losses under the Multi-Year Tariff Order.

The DisCos had, for several years clamored for cost-reflective tariffs.

“DisCos are not being able to recover NESI ́s cost of service as the real ATC&C losses are much higher than that under MYTO. This fact is exacerbating DisCos liquidity crisis and cash stress, weakening DisCos’ balance sheets and preventing access to funding, ultimately, impeding DisCo performance improvement. Thus, it raises the question of whether there can be future DisCo improvement if the situation currently precludes any major investment in NESI?” ANED said.

The Federal Government had, some time ago, mopped up customers’ tariff debts to the DisCos.

A spokesperson for IKEDC, Felix Ofulue, also told The Punch that the Federal Government had been stepping in with various interventions to the power sector through the Central Bank of Nigeria.

An increase in tariffs cumulates in equally increased revenue for the DisCos.

“The removal of the subsidy after the Extraordinary Tariff Review in November 2020, which resulted in an increase of the Allowed Tariff, and has driven new records in revenues and collections. The good news is that, even in a scenario of tariff increases, DisCos have experienced two quarters in a row with a collection efficiency of more than 70 percent,” ANED said.

Petroleum Engineer and Technical Director-Drill Bits, Bala Zaka, confirmed the reduction in electricity units from DisCos to customers since last year.

“It is very unfortunate that DisCos do not want to realize or appreciate the extent to which they are causing collapse to the strategic, to the industrial, commercial and domestic sectors, because lack of energy is one of the reasons why all those sectors are not doing well. The current tariff on electricity has not been fair and it is one of the principal reasons one of these sectors we have outlined is not doing well and not breaking even. They are talking of a country of about 200 million citizens with strategic sectors still relying on less than 10, 000mw of electricity despite the increment that has been taking place, and there is no way this DisCos will say they are helping to grow this economy,” he said.

He added that lack of electricity could lead to a breakdown in economic growth.

“Lack of stable power is why most of the time, industries resort to diesel generators. Now that the cost of diesel has gone high again, industrialists and all these sectors now want to start using petrol generators to complement. And with this noise about the removal of subsidies, that means there will be no energy. They should understand that whenever they say we need electricity if there is electricity, it will provide a backbone for manufacturing.  Some of these discos also need to know that all the strategic sectors have not been enjoying quality service deliverability from them, and that is one of the reasons many of them are not breaking even. They will be forced to lay off staff, and if that happens, then that means there will be no personal income tax for the government,” he said.

Metering expert and Accountant, Olusesan Okunade, told The PUNCH that the cost-reflective tariff was the reason for some of the increases in tariffs.

“The different charges and migration of customers based on the power supply have created most of the difference experienced by customers,”  he added, noting that some of the Discos had not been fair in the cost-reflective tariff because most of the time, they change the class of tariffs whenever there is a slight increase in supply for some days and this will never go down again.”

 

Credit: The Punch

Advertisement

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

BIG STORY

SSANU, NASU Issue Seven-Day Strike Notice Over Earned Allowances, Others

Published

on

The Senior Staff Association of Nigerian Universities (SSANU) and the Non-Academic Staff Union of Educational and Associated Institutions (NASU) have given the Federal Government a seven-day ultimatum to address long-standing grievances affecting non-academic staff across universities.

In a joint letter dated September 12, 2025, the unions criticised what they described as the “unfair” sharing of earned allowances, the non-payment of outstanding entitlements, and delays in resolving other critical labour matters.

The document, signed by SSANU President Muhammed Ibrahim and NASU General Secretary Peters Adeyemi, reminded Education Minister Tunji Alausa of an earlier letter from their Joint Action Committee (JAC) on June 18, 2025. That letter, they said, had outlined pressing issues requiring government intervention.

Following the correspondence, the minister convened a meeting with NASU and SSANU leaders on July 4, 2025, to discuss the concerns raised.

According to the unions, the outstanding matters include: the “unjust disbursement” of ₦50 billion in earned allowances, non-payment of withheld salaries, failure to implement a 25/35 per cent salary increment, and the delayed renegotiation of the 2009 FGN–NASU/SSANU agreements.

They warned that if the government failed to act within the seven-day window starting Monday, September 15, 2025, their members would embark on a series of lawful industrial actions, including strikes.

The statement further noted that during the July 4 meeting, it was agreed that a Tripartite Committee—comprising the Federal Ministry of Education, the National Universities Commission, and representatives of the two unions—would be set up to address the imbalance in the ₦50 billion allowances. The unions argued that while university staff received a share, workers in Inter-University Centres were completely excluded.

On the matter of two months’ withheld salaries, the unions said there was no resolution at the July meeting. However, the minister reportedly pledged to fast-track the payment of arrears tied to the 25/35 per cent salary increment owed to members.

They added that a reminder letter was sent to the minister on August 18, 2025, due to what they described as his office’s silence—or deliberate refusal—to act on the issues.

The statement also faulted the government for dragging its feet on the renegotiation of the 2009 agreements. The committee chaired by Alhaji Yayale Ahmed, inaugurated on October 15, 2024, only met with the JAC once—on December 10, 2024. Since then, the unions claimed, the government team has stopped engaging them, even though it has reportedly concluded renegotiations with the Academic Staff Union of Universities (ASUU).

The unions recalled that they raised this concern during the July 4 meeting, where the minister promised to intervene. However, no progress has been recorded since then.

“Despite our repeated attempts to draw attention to the plight of our members in universities and Inter-University Centres, the government has failed to act,” the unions said.

They stressed that, given the continued inaction, they had no choice but to issue a final seven-day notice beginning September 15, 2025. Failure to meet their demands, they warned, would result in nationwide strikes and other industrial actions.

Continue Reading

BIG STORY

Nepal Protests: Two Nigerian Inmates Rearrested After Jailbreak

Published

on

Two Nigerian nationals who allegedly broke out of prison in Nepal during recent anti-government demonstrations have been captured by India’s paramilitary force, the Sashastra Seema Bal (SSB).

According to a Monday report by the Press Trust of India, the duo was apprehended on Saturday in Jainagar, Bihar State, as they attempted to cross the border back into Nepal.

The Nigerians were reported to be among dozens of detainees—both locals and foreigners—who escaped correctional facilities in Nepal amid violent protests that shook the Himalayan country in recent weeks.

Quoting a security source, the news agency said: “These individuals were intercepted at the border in the past three to four days after escaping from different jails during the massive anti-government demonstrations in Nepal.”

The SSB disclosed that more than 79 fugitives, including foreign nationals, have so far been arrested in various Indian states adjoining Nepal.

Authorities explained that the large-scale manhunt became necessary because the 1,751-kilometre-long India-Nepal border, spread across 20 districts in five states, is largely open and without fencing.

The arrest of the Nigerians has once again spotlighted the recurring involvement of some Nigerian nationals in cross-border crimes across Asia, a trend that has increasingly worried law enforcement agencies.

Earlier reports had it that police in Kozhikode City, India, arrested eight Nigerians accused of drug trafficking.

The Hindu newspaper noted that the suspects allegedly held “key roles” in a wider drug cartel said to operate across multiple Indian states.

In collaboration with a state-level task force, the Kozhikode police also discovered a synthetic drug laboratory in Gurugram, Haryana, with assistance from police units in Delhi and Haryana.

Continue Reading

BIG STORY

FX Inflows, Reserves Boost Naira To N1,497/$

Published

on

The Nigerian naira on Monday gained ground against the United States dollar, breaking below the ₦1,500/$ barrier for the first time in over six months. Figures from the Central Bank of Nigeria showed the currency closed at ₦1,497.46/$, an improvement on the previous rate of ₦1,501.49/$, representing a 0.27 per cent appreciation.

The last time the naira traded under ₦1,500/$ at the official market was between February 24 and March 4, 2025. The recent rebound follows a week where the local currency hovered around that mark, with intra-day trades mostly above ₦1,500/$.

The positive movement was also seen in the parallel market, where the naira rose by 0.33 per cent to close at ₦1,535/$, according to data from CardinalStone Research.

Market trackers noted that the naira advanced by 0.98 per cent week-on-week to end at ₦1,501.50/$ at the official window, while the parallel market posted a 0.33 per cent gain at ₦1,535/$.

A report by Coronation Weekly Update highlighted that the official exchange rate closed the week at a ₦35.50 or 2.23 per cent premium compared to the parallel market rate, showing the gap between both markets has continued to narrow.

The report also indicated that total foreign exchange inflows into Nigeria reached $550.90 million last week, slightly lower than the $567.20 million recorded in the preceding week.

Foreign portfolio investors accounted for the bulk of the inflows with $303.8 million, or 55.15 per cent. Exporters contributed 17.61 per cent, non-bank corporates 17.57 per cent, other corporates 4.32 per cent, foreign direct investments 3.39 per cent, the CBN 2.36 per cent, and individuals 0.60 per cent.

Analysts attributed the naira’s appreciation to strong foreign portfolio inflows, robust external reserves, and sustained interventions from the central bank.

AIICO Capital observed that abundant dollar liquidity from portfolio investors, oil exporters, and offshore flows created a stable market tone throughout the week.

“The FX market is expected to retain its stability, buoyed by CBN policy measures and government fiscal actions to maintain sufficient liquidity,” analysts at the firm stated.

Cowry Asset Management also noted that the naira’s rebound was driven by steady inflows, CBN interventions, and growing reserves, but cautioned that speculative activities could still spark volatility.

“We expect the naira to maintain its upward trend in the near term, anchored on dollar inflows, central bank interventions, and stronger reserves. Nonetheless, speculative trades may reintroduce pressure,” the company said.

Experts forecast that the naira is likely to trade within a narrow range in the short term. Coronation analysts suggested that stability could persist if inflows remain steady and reserves stay healthy but warned that pressure may return should portfolio inflows slow or FX demand rise ahead of the festive season.

Meanwhile, Nigeria’s gross external reserves climbed to $41.69 billion as of Friday, reflecting consistent daily accretions. Analysts believe this trend will enhance investor confidence and reinforce the central bank’s stabilisation efforts.

Despite recent gains, experts cautioned that the naira’s resilience depends on deeper structural reforms, diversified foreign exchange sources, and policies aimed at attracting long-term direct investment rather than relying heavily on portfolio flows.

For now, the naira’s recovery below ₦1,500/$ signals renewed market confidence, though its durability will be tested in the coming weeks against external shocks and speculative pressure.

Continue Reading


 

 


 

 

 

Join Us On Facebook

Most Popular