The Federal Government’s electricity subsidy rose from N252.76bn to N633.30bn in the first quarter of 2024, according to the Nigerian Electricity Regulatory Commission (NERC).
The monthly subsidy increased to N211.10bn from N84.25bn in the last quarter of 2023 due to the harmonisation of exchange rates and maintaining December 2022 tariffs.
The absence of cost-reflective tariffs led to the government covering the gap, resulting in high subsidy obligations.
In the first quarter, the total remittance performance of distribution companies (Discos) to the Nigerian Bulk Electricity Trading Plc (NBET) was 99.33%, up from 69.92% in the previous quarter.
The NERC had previously cut off subsidies for Band A, increasing tariffs in that category. The International Monetary Fund (IMF) has urged Nigeria to remove implicit energy subsidies, warning they could consume 3% of the nation’s GDP in 2024.
(PUNCH)