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Federal Government’s Power Subsidy Soars By 151% To ₦‎633.30 Billion - Politics - Nairaland 161x3n

Federal Government’s Power Subsidy Soars By 151% To ₦‎633.30 Billion (7692 Views)

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SmartPolician: 10:31am On Aug 05, 2024
The electricity subsidy obligation of the federal government rose from N252.76 billion in the last quarter of 2023 to N633.30 billion in Q1 of 2024, a report by the Nigerian Electricity Regulatory Commission (NERC) has revealed.

The NERC said the government’s electricity subsidy reached N211.10 billion per month in the first three months of 2024, from N84.25 billion in Q4 of 2023.

According to NERC, the increase was attributed largely to government’s policy to harmonise the exchange rates while also issuing a policy directive that end- customer tariffs remain at the rates that came into effect in December 2022.


“Due to the absence of cost-reflective tariffs across all distribution companies, the government incurred a subsidy obligation of N633.30 billion (90.57 per cent of total Nigerian Bulk Electricity Trading Plc invoice) in Q1 2024 (average of N211.10 billion per month). Across 2024/Q1, this represents an increase of N380.56 billion (150.56 per cent) compared to the N252.76 billion (average of N84.25 billion per month) incurred in Q4 2023,” the regulator stated.

The absence of cost-reflective tariffs was said to have caused the federal government to undertake to cover the resultant gap between the cost-reflective and allowed tariff in the form of tariff subsidies.


For ease of istration, the subsidy is only applied to the generation cost payable by Discos to NBET at source in the form of Disco’s Remittance Obligation.

The DRO, it was learnt, represents the total Genco invoice that is billed to the Discos by NBET based on what the allowed Disco tariffs can cover.

In the first three months of the year, the DRO-adjusted invoice from NBET to the Discos was said to be N65.96 billion while the total remittance made was N65.52 billion, which translates to a 99.33 per cent remittance performance.


“Comparatively, in 2023/Q4, the Minimum Remittance Obligation-adjusted invoice from NBET to Discos was N223.32 billion and the total remittance was N156.40 billion, which translated to a 69.92 per cent remittance performance. This means that the remittance performance of Discos to NBET increased by 29.41 points percentage in 2024/Q1 compared to 2023/Q4,”
the NERC said.

Recall that the NERC had on April 3, 2024 cut off subsidy payment in areas categorised as Band A, in an attempt to reduce subsidy obligations. This has since raised the tariff in Band A to above N200 per kilowatt-hour from N68.

It was gathered that the electricity claim for April was N140 billion; it was N102.30 billion in May and N158.53 billion in June, a reflection of the Band A subsidy removal. However, it is higher than the N84 billion recorded monthly in Q4 2023.

The recent removal of NERC from NBET power purchase agreement between the Discos and Gencos, affords the two parties the chance to transact businesses without a middleman.

Meanwhile, the International Monetary Fund (IMF) has warned the Nigerian government to remove what it called implicit energy subsidies.

In a recent report, the IMF told Nigeria that the subsidies would gulp three per cent of the nation’s gross domestic product in 2024, as against one per cent in the year before.

“As Nigerians agitate for the reversal of the Band A tariff to N68/kWh, IMF submitted, The tariff adjustment will help reduce expenditure on subsidies by 0.1 per cent of gross domestic product while continuing to provide relief to the poor, particularly in rural areas,” IMF said.

Source: https://www.thisdaylive.com/index.php/2024/08/05/federal-governments-power-subsidy-soars-by-151-to-n633-30bn/

1 Like

SmartPolician: 10:32am On Aug 05, 2024
So the FG is still paying power subsidy? I no understand this country again oh!

36 Likes 3 Shares

trutharena: 11:17am On Aug 05, 2024
This is a great move by the FG! Investing in power is crucial for our development. Let's keep the momentum going and ensure that every Nigerian enjoys the benefits of this subsidy. Progress is happening!

32 Likes 3 Shares

MissKudoswrite(f): 2:01pm On Aug 05, 2024
Hmm
MarveworldG: 2:01pm On Aug 05, 2024
May Nigeria succeed 🙏


Dear , the last ban and deleting our post was quite unfair.
Please be considerate, we beg you
saddler: 2:01pm On Aug 05, 2024
undecided

Nigeria failed a long time ago. They are just trying to patch it and in the process loot the country

5 Likes

OkpaNsukkaisBae(m): 2:01pm On Aug 05, 2024
They should return petrol subsidy too

6 Likes 1 Share

phemmie06(m): 2:02pm On Aug 05, 2024
I smell something fishy
MadamVanessa(f): 2:02pm On Aug 05, 2024
shocked



This fraudulent government of Tinubu 😲😲

9 Likes 2 Shares

saintbillion(m): 2:02pm On Aug 05, 2024
Tinubu must die.

3 Likes 3 Shares

mrvitalis(m): 2:03pm On Aug 05, 2024
We can't continue like this na
Shurtman79(m): 2:03pm On Aug 05, 2024
Very soon very soon everything go soon clear I dey talk am
nony43(m): 2:03pm On Aug 05, 2024
When una ready , we go come and agree on how we go take share this country into 4.

2 Likes

Risingblue008(m): 2:04pm On Aug 05, 2024
For apc mind
They are workin

Jaga jaga government

5 Likes 2 Shares

Kobojunkieee: 2:04pm On Aug 05, 2024
SmartPolician:
According to NERC, the increase was attributed largely to government’s policy to harmonise the exchange rates while also issuing a policy directive that end- customer tariffs remain at the rates that came into effect in December 2022.
“Due to the absence of cost-reflective tariffs across all distribution companies, the government incurred a subsidy obligation of N633.30 billion (90.57 per cent of total Nigerian Bulk Electricity Trading Plc invoice) in Q1 2024 (average of N211.10 billion per month). Across 2024/Q1, this represents an increase of N380.56 billion (150.56 per cent) compared to the N252.76 billion (average of N84.25 billion per month) incurred in Q4 2023,” the regulator stated.
Tinubu's many "Avoid eliminating the criminals and problems in the system, but punish the people," policies are no good for Nigeria at all abeg! What am I even saying? This is the same government that is noted to be engaged in bribery and corruption schemes left, right, and center. How can the same be expected to reasonably resolve any of the real issues impacting the people? undecided

2 Likes

Brendaniel: 2:04pm On Aug 05, 2024
It's soaring as the dollar soars against the naira , Tinubu....

1 Like

emmafineboy(m): 2:04pm On Aug 05, 2024
Rubbish 🗑️

2 Likes

iwaeda: 2:05pm On Aug 05, 2024
SmartPolician:


Source: https://www.thisdaylive.com/index.php/2024/08/05/federal-governments-power-subsidy-soars-by-151-to-n633-30bn/

Yet they have increased the banding of people to Band A, Paying . What do you believe in APC, lies their trademark. grin grin grin grin grin grin cry cry cry

2 Likes

YeyeGbami: 2:05pm On Aug 05, 2024
CalabarPikin:
Please, I've been wanting to ask the reason for the other flag behind our president yesterday...any idea..?

Armed Forces flag

35 Likes 1 Share

GboyegaD(m): 2:05pm On Aug 05, 2024
The current governs is a colossal failure. How do you explain this subsidy with the increasing rate per Kilowatt?

3 Likes

davinero1: 2:05pm On Aug 05, 2024
I can bet my hungry balls that not even up to 50% of that figure actually goes into subsidizing power at all.
Hunger wants to finish somebody

7 Likes

CalabarPikin: 2:06pm On Aug 05, 2024
If them explain this country give you and you understand, that means them no explain am well

1 Like

Salewa97: 2:06pm On Aug 05, 2024
The increase in power subsidy is a clear indication that the federal government is committed to ensuring affordable electricity for Nigerians. Yes, it’s a hefty sum, but the priority should be on stabilizing our power sector for the long-term benefit of all citizens. Let's the government's efforts to harmonize tariffs and gradually phase out subsidies. It’s all about creating a sustainable energy future for Nigeria!

27 Likes

CalabarPikin: 2:07pm On Aug 05, 2024
Please, I've been wanting to ask the reason for the other flag behind our president yesterday...any idea..?

1 Like

chiiraq802(m): 2:07pm On Aug 05, 2024
Guy!!! mk FG just give me dat #633.30 Billion....and I will Japa and leave them with there faithful ers.
gaby(m): 2:07pm On Aug 05, 2024
Everything and everywhere just dey collapse...

I am ashamed and disgusted to finally realize and it that Buhari is smarter and a better /manager than Tinubu.

As bad as Buhari seemed/was oh...

3 Likes

Manculated: 2:07pm On Aug 05, 2024
saintbillion:
Tinubu must die.

AMEN!!!!
OkCornel(m): 2:12pm On Aug 05, 2024
Dear Sycophants.

On August 29 2023, Tinubu’s government promised to create 50 million jobs and revive the economy.

This is almost one year. How far with your messiah’s plan?

https://nairaland.macsoftware.info/7821154/tinubu-sets-3-year-economic-revival

1 Like

Elidrisy20: 2:14pm On Aug 05, 2024
CalabarPikin:
Please, I've been wanting to ask the reason for the other flag behind our president yesterday...any idea..?
that is Russian flag, he has committed a treason

1 Like 1 Share

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