In the latest developments from the Nigerian energy sector, the Nigerian Electricity Regulation Commission (NERC) has unveiled a significant governmental intervention in the form of an N36 billion subsidy for electricity consumption during the first quarter of 2023.
According to the recently released quarterly report by the NERC, the federal government disbursed a total of N36 billion in the span of three months, with a monthly allocation of N12 billion to subsidize electricity usage across the nation. This financial support was channeled to the Nigerian Bulk Electricity Trading (NBET), a key player in the nation’s energy landscape.
The sum of N141.5bn was paid to the NBET which has been charged with the collection of revenues due to generation companies and the Transmission Company of Nigeria from the DisCos. The money was paid from the N209.2bn invoice given to the DisCos.
The total revenue collected by the 11 Distribution Companies (DisCos) in the first quarter was N247bn from the N359.3bn billed to customers.
A breakdown indicated that Abuja DisCo paid N20bn from the N32.8bn it was billed, while Benin DisCo paid N14.4bn from the N17.8bn, Eko Disco paid N19.4bn from the N22.8bn it was charged and Enugu DisCo paid N15.72bn from its N20bn.
Ibadan Disco paid N17.5bn from its invoice of N24.5 billion, Ikeja DisCo paid N29.6bn from the N35.9bn given to it, Jos Disco paid N7.bn from the 8.8bn it was billed, Kaduna DisCo paid N1.8bn from the N15.3 bn. given to it, Kano paid N6.1 from its N15.bn with Port Harcourt DisCo paying 8.5bn from its N14.5bn and Yola Disco paid N899m from the N1bn it was billed.
NERC said the federal government intervened because, in the “absence of cost-reflective tariffs, the government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff shortfall funding. This funding is applied to the NBET invoices that are to be paid by DisCos.”
