FG incurs ₦633b electricity subsidy in Q1 2024 despite tarrif increase

As reported by the Nigerian Electricity Regulatory Commission, this figure indicates a 150.5 percent increase compared to ₦252.76 billion in the fourth quarter of 2023.

The amount spent in the first three months of this year also surpasses the ₦628.61 billion allocated from January to December 2023.

A detailed breakdown of the ₦633.30 billion shows subsidies accounted for ₦36.02 billion in the first quarter, ₦135.23 billion in the second quarter, ₦204.6 billion in the third quarter, and ₦252.76 billion in the fourth quarter of 2023.

The electricity market regulator attributed the rise in subsidy costs to the government’s policy of harmonizing exchange rates and the lack of cost-reflective tariffs across all electricity distribution companies.

“It is important to highlight that the absence of cost-reflective tariffs in all DisCos resulted in a subsidy obligation of ₦633.30 billion in Q1 2024, averaging ₦211.10 billion per month,” the report stated.

Regarding revenue collection, the report noted that DisCos experienced a shortfall, with total revenue for the period at ₦291.62 billion, compared to ₦368.65 billion billed to customers.

Furthermore, the total energy supplied to all DisCos was 7,171.93 GWh, while the energy billed to end-users was 5,769.52 GWh, resulting in an overall billing efficiency of 80.45 percent.

Ikeja DisCo led in revenue collection with ₦57.88 billion, followed by Eko DisCo at ₦48.74 billion, while Yola DisCo reported the lowest revenue at ₦5.46 billion.

Additionally, the revenue collected by other DisCos includes Abuja DisCo at ₦48.60 billion, Ibadan DisCo at ₦30.35 billion, Benin DisCo at ₦22.46 billion, Enugu DisCo at ₦21.24 billion, and Port Harcourt DisCo at ₦20.39 billion.

Other figures include Kano DisCo at ₦13.62 billion, Jos DisCo at ₦13.29 billion, and Kaduna DisCo at ₦9.60 billion.