In his presentation, the Chairman, Nigerian Electricity Regulatory Commission, NERC, Engr. Sanusi Garba disclosed that without a cost reflective tariff the government would have to pay about N1.6 trillion to subsidize electricity tariff shortfall in 2024.
He explained inflation and the Federal Government decision to unify the foreign exchange market have pushed cost reflective tariff to N124/kWh from the subsidized N73/kWh charged to Band-A customers, adding that this year alone, subsidy is expected to top the N600 billion mark.
He disclosed that the financial burden due to tariff subsidies between 2015 and 2022 stood at N2.8 trillion, adding that it was imperative that the government supports the review of end user tariff to minimize fiscal burden in the sector.
He therefore proposed the implementation of an automatic monthly tariff adjustment to manage volatilities in foreign exchange and inflation.