BARELY 24 hours after News Point Nigeria had reported that a likely increases in electricity tariff looms as a result of the new price of natural gas for power generation companies, the Federal Government has jacked up the electricity tariff for Band A customers.
On Tuesday, this newspaper reported that the Federal Government had announced that the new price of natural gas for power generation companies is now $2.42 per metric million British thermal unit, higher than the previous rate of $2.18mmbtu.
Nigeria generates over 70 per cent of its electricity from thermal power plants that are fired by gas. Therefore, the rise in the cost of the commodity will lead to a hike in the tariff payable by power consumers once the Nigerian Electricity Regulatory Commission carries out another tariff review.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority, an agency of the Federal Government, unveiled the new domestic base price and wholesale prices of natural gas for 2024 in an announcement on Monday.
The NMDPRA also pegged the cost of commercial gas at $2.92mmbtu, up from the previous cost of $2.5mmbtu. The announcement was signed by the Chief Executive, NMDPRA, Farouk Ahmed.
Confirming our story at a press briefing in Abuja on Wednesday, Musliu Oseni, Vice Chairman of the Nigerian Electricity Regulatory Commission (NERC), said the increase will see customers pay ₦225 kilowatts per hour, up from the current ₦66.
Oseni said these customers represent 15 per cent of the 12 million electricity customers in the country.
He added that the commission had also downgraded some customers on Band A to Band B due to non-fulfilment of the required hours of electricity provided by the electricity distribution company.
“We currently have 800 feeders that are categorised as Band A, but it will now be reduced to under 500. This means that 17 per cent now qualify as Band-A feeders. These feeders only service 15 per cent of total electricity customers connected to the feeders.
“The commission has issued an order which is titled April supplementary order and the commission allows a 235 kilowatt per hour.”
He noted that the review will not affect customers on the other Bands.
Bloomberg on Tuesday reported that power companies will be allowed to raise electricity prices to N200 ($0.15) per kilowatt-hour from N68 for urban consumers.
It quoted people in the presidency with knowledge of the matter saying this was in a bid to attract new investment and slash about $2.3bn spent to cap tariffs (subsidies).
According to the news agency, “Nigerians will now have to pay $2.42 per one million British thermal units from the previous rate of $2.18 MMBtu.”
The increase follows Monday’s announcement by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of an increase in the price of natural gas to power.
See below link to News Point Nigeria’s Tuesday story on imminent electricity tariff hike:
High Electricity Rate Looms As FG Raises Gas Price
https://antiquewhite-elephant-634158.hostingersite.com.ng.ng/high-electricity-rate-looms-as-fg-raises-gas-price/