Nigerians brace for another electricity tariff hike as NERC reviews power costs

• NERC is reportedly reviewing electricity tariffs across customer bands.

• The move is linked to rising generation, transmission and gas costs.

• Nigerians are expressing concern over another possible increase in living expenses.

• The current minimum wage remains N70,000 amid worsening inflation.

Nigerians may soon face another increase in electricity tariffs as the Nigerian Electricity Regulatory Commission reviews current power rates across customer bands.

The planned review is coming amid rising costs within the electricity sector, including inflation, exchange rate pressures, gas supply expenses and mounting debts owed to power generation companies.

Although the commission has not officially announced a fresh nationwide tariff increase, recent industry discussions and regulatory reviews have fuelled concerns that electricity consumers across multiple bands could soon pay more for power supply.

Nigeria currently operates a band-based electricity system under which customers are charged according to the number of hours of electricity supplied daily.

Band A customers, who are expected to receive about 20 hours of electricity daily, were already hit with a major tariff increase in 2024, with rates rising to over N200 per kilowatt-hour.

Bands B, C, D and E have largely remained under older pricing structures, but reports now suggest regulators may extend tariff adjustments beyond Band A as operators continue to complain about financial losses in the sector.

The possible increase is also tied to the Multi-Year Tariff Order framework used by NERC to periodically review electricity pricing based on economic realities and operational costs.

Power generation companies and electricity distribution companies have repeatedly argued that current tariffs are no longer sustainable due to rising operational expenses and inadequate government subsidies.

The commission recently introduced additional transmission-related regulations and revised energy caps for distribution companies in an effort to improve efficiency and reduce losses across the national grid.

However, the development is already generating anxiety among many Nigerians struggling with rising living costs and worsening inflation.

For millions of households and small businesses, electricity remains a major expense, especially in a country where unreliable power supply forces many people to depend heavily on petrol and diesel generators.

The fear of another tariff increase comes as food prices, transportation costs and house rents continue to rise nationwide despite the current minimum wage standing at N70,000.

Many small business owners, including barbers, welders, frozen food sellers and cyber café operators, rely on electricity daily and could face additional operational pressure if tariffs are increased again.

The Nigerian power sector has faced persistent challenges for years, including inadequate generation capacity, weak transmission infrastructure, grid collapses and revenue collection problems.

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Despite several tariff reviews over the years, many consumers continue to complain about poor electricity supply, estimated billing and irregular service delivery.

As discussions around a fresh review continue, attention is expected to focus on whether Nigerians will receive improved electricity supply alongside any new tariff increase.