“Nigerian Govt Subsidizes Electricity with N36bn in Q1 2023

According to a quarterly report by the Nigerian Electricity Regulation Commission (NERC), the Federal Government spent a total of N36 billion in Q1 2023 to subsidize electricity consumption in the country. This amount translated to a monthly payment of N12 billion to the Nigerian Bulk Electricity Trading (NBET).

The NBET, responsible for collecting revenues from DisCos on behalf of generation companies and the Transmission Company of Nigeria, received N141.5 billion out of the N209.2 billion invoice issued to the DisCos.

A breakdown of the figures reveals how each DisCo paid its respective share. Abuja DisCo paid N20 billion from its N32.8 billion bill, while Benin DisCo paid N14.4 billion from N17.8 billion. Eko Disco paid N19.4 billion from N22.8 billion, and Enugu DisCo paid N15.72 billion from N20 billion.

Ibadan Disco paid N17.5 billion from its N24.5 billion invoice, Ikeja DisCo paid N29.6 billion from N35.9 billion, and Jos Disco paid N7 billion from N8.8 billion. Kaduna DisCo paid N1.8 billion from N15.3 billion, Kano paid N6.1 billion from N15 billion, Port Harcourt DisCo paid N8.5 billion from N14.5 billion, and Yola Disco paid N899 million from N1 billion.

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NERC explained that the government’s intervention was necessitated by the “absence of cost-reflective tariffs.” To bridge the gap between cost-reflective and allowed tariffs, the government provides tariff shortfall funding, which is applied to the NBET invoices to be paid by DisCos. This subsidy helps ensure electricity affordability for consumers in the absence of fully cost-reflective tariffs.