The Federal Government spent N375.8bn on electricity subsidy between January and September this year, as power consumers paid a total of N782.6bn for the commodity during the same period, it was gathered on Sunday.

The latest power subsidy figures obtained in Abuja from the Nigerian Electricity Regulatory Commission, an agency of the Federal Government, showed that the government subsidised electricity in the first, second and third quarters of 2023.

It was also gathered that power distribution companies billed electricity users a total of N1.06tn nationwide during the nine-month period, but collected N782.6bn despite the blackouts in many parts of Nigeria.

On subsidy payments, it was observed that in the first quarter of this year, the Federal Government subsidised power by N36bn, this increased to N135.2bn in the second quarter, and jumped to N204.6bn in the third quarter. Figures for the fourth quarter are not because we are still in the fourth quarter of 2023.



So This Happened (225)...
Providing reasons for the subsidy in its just-released third-quarter 2023 report, the NERC stated that it was due to the absence of cost-reflective tariffs.

It said, “In the absence of cost-reflective tariffs, the government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff shortfall funding. This funding is applied to the NBET (Nigerian Bulk Electricity Trading Company) invoices that are to be paid by Discos.

“The amount to be covered by the Disco is based on the tariff that they are allowed to charge and set out as their Minimum Remittance Obligation in the periodic Tariff Orders issued by the Commission.


“It is important to note that due to the absence of cost-reflective tariffs across all Discos, the government incurred a subsidy obligation of N204.59bn in 2023/Q3 (average of N68.20bn per month), which is an increase of N69.37bn (+51.3 percent) compared to the N135.23bn (average of N45.08bn per month) incurred in 2023/Q2; this increase is largely attributable to the government’s policy to harmonise exchange rates.

“The rise in the government’s subsidy obligation meant that in 2023/Q3, Discos were only expected to cover 45 percent of the total invoice received from NBET. For ease of administration of the subsidy, the MRO is limited to NBET only with the MO (Market Operator) being allowed to recover 100 percent of its revenue requirement from the Discos.”

On the payment of electricity bills, it was observed from the three quarterly reports of the power regulator, that consumers paid N247.09bn, N267.86bn and N267.61bn in the first, second and third quarters of 2023 respectively. This represents a total of N782.56bn.

It was also observed that during the three quarters: first, second and third, the electricity bills from Discos to consumers were N349.55bn, 354.61bn and N359.38bn respectively. The total bill for the nine-month period was N1.06tn.


In its latest third quarter 2023 report, the NERC stated that “the total revenue collected by all Discos in 2023/Q3 was ₦267.61bn out of ₦349.55bn billed to customers.

“This translates to a collection efficiency of 76.56 percent, which represents an increase of +1.02 basic points when compared to 2023/Q2 (75.54 percent). The increase in collection efficiency can be attributed to the implementation of various collection campaigns for improved remittance by post-paid customers.”

On market remittance, it stated that “in 2023/Q3, the cumulative upstream invoice payable by Discos was ₦208.7bn, consisting of ₦167.4bn for generation costs from NBET and ₦41.3bn for transmission and administrative services by the Market Operator.

“Out of this amount, the Discos collectively remitted a total sum of ₦158.43bn (₦124.53bn for NBET and ₦33.9bn for MO) with an outstanding balance of ₦50.27bn.

“This translates to a remittance performance of 75.91 percent in 2023/Q3, which is down by 19.30 basic points compared to the 95.21 percent recorded in 2023/Q2.”

For remittance by special and cross-border customers in 2023/Q3, the commission stated that none of the four international customers being supplied by Nigeria’s power generation companies in the sector made any payment against the cumulative invoice of $11.16m issued to them by the MO for services rendered in 2023/Q3.

“Similarly, none of the 16 bilateral customers operating in the NESI (Nigeria Electricity Supply Industry) made any payment against the cumulative invoice of N2,814.68m issued to them by the MO for services rendered in 2023/Q3,” the NERC stated.

Speaking with The PUNCH, the President of the Electricity Consumers Association of Nigeria, Chijioke James said there was no clear indication as to whether the government was paying subsidy on electricity as claimed.

He also faulted the comparisons made by the government which tends to suggest the fact that Nigerians were paying less for electricity than many of its counterparts.

He said, “The subsidy that they say the government is paying is not clear. There is no clarity on how the government pays this subsidy. If we had a transparent process, everybody would see the volume of commitment that the government is making and would be able to appreciate it.

“We are more concerned about the transparent process of what constitutes the subsidy and the tariff regime. If we had a transparent process, we would do a cost-benefit analysis, all the stakeholders would know how to make sure that everybody is carried along in a fair and equitable.”

Source: https://punchng.com/Electricity-subsidy-gulps-N376bn-consumers-pay-N783bn

Hehehe.

Scammers,they claim they are paying subsidy,but the process and way they are paying the assumed subsidy is not clear according to the article .

They are paying subsidy and power holding companies are still on estimated billings .

Nigeria na cruise.

Electricity Subsidies without electricity supplies.

The question is, if government removes electricity subsidy too and the price hikes, can rural Nigerians afford electricity bill with 30k minimum wage?

Our purchasing power or disposable income is very poor.

crossfm:
Hehehe.

Scammers,they claim they are paying subsidy,but the process and way they are paying the assumed subsidy is not clear according to the article .

They are paying subsidy and power holding companies are still on estimated billings .

Nigeria na cruise.

It was calculated for those on prepaid

I don't think there is subsidy in electricity in Nigeria

cenaman:
I don't think there is subsidy in electricity in Nigeria

Those on estimated bill paying 3000 naira with heaters, iron, freezers et cetera are on subsidy.

Hmmm... That's a whole lot.

PDP destroyed this country patapata, you privatized NEPA to incompetent cronies and then have to start paying them subsidy every month for God knows.

Ebubu:
Those on estimated bill paying 3000 naira with heaters, iron, freezers et cetera are on subsidy.

You made this comment with a false assumption that there is 24 hours of power supply.
Many on estimated billing are paying for BLACKOUT. That's like going to a petrol station, paying 5,000 for petrol to be filled in your jerry can, they collect the money and give you back your EMPTY jerry can. 5,000 Naira for empty stuff is subsidy?

Ebubu:
The question is, if government removes electricity subsidy too and the price hikes, can rural Nigerians afford electricity bill with 30k minimum wage?

Our purchasing power or disposable income is very poor.

Poor people can afford electricity.
Everyone will find their own level.

With everyone on prepaid, you buy what you can afford. You can buy 500 naira token and load it on your prepaid to charge your phones, laptops only. It can last for more than 4 months.

Where's the electricity they are subsidizing

jmoore:

Poor people can afford electricity.
Everyone will find their own level.

With everyone on prepaid, you buy what you can afford. You can buy 500 naira token and load it on your prepaid to charge your phones, laptops only. It can last for more than 4 months.

Yet the prepaid meters are yet to go round. You even see people in state capitals deliberately using old meter(postpaid) instead of prepaid. They are conscious that their freezer, iron, electric heater, AC will become accountable under prepaid than postpaid so they deliberately don’t change their meter the prepaid meter.

Government should go about disconnecting every line that is not on prepaid. Give a deadline and disconnect.

jmoore:

You made this comment with a false assumption that there is 24 hours of power supply.
Many on estimated billing are paying for BLACKOUT. That's like going to a petrol station, paying 5,000 for petrol to be filled in your jerry can, they collect the money and give you back your EMPTY jerry can. 5,000 Naira for empty stuff is subsidy?

Those on prepaid meter using same appliances pay more to use them than those on postpaid even with the same numbers of hours of electricity.

Ebubu:


Those on prepaid meter using same appliances pay more to use them than those on postpaid even with the same numbers of hours of electricity.

prepaid
postpaid
estimated

prepaid and postpaid pay the same thing.

It is only those on estimated billing that pay less, but they pay more during blackout.

Yeah that's corruption...

APC is a fraud

Consumers paid close to 70%, that's impressive.

How do they get these figures buh nnpc can't account the oil output they get on daily bases

Ebubu:
The question is, if government removes electricity subsidy too and the price hikes, can rural Nigerians afford electricity bill with 30k minimum wage?

Our purchasing power or disposable income is very poor.

Who you dey ask that kind nonsense question??

You want to sabotage Asiwaju government, you will fail

The electricity we the masses don't see or which other ones are you discussing about?

Hmmm...

Electricity subsidy in Nigeria is a scam and never exist..

Power in Nigeria is the biggest scam.

Nawaaoo

Insane figures.

What kinda privatisation went down in phcn? What kinda subsidy is the government still paying? Why are the power companies more like government organizations with no form of competition from anywhere? Privatisation of phcn is a sham