The Nigerian government has yet again approved an increase in electricity tariff payable by electricity consumers in Nigeria.

The Nigerian Electricity Regulatory Commission, NERC, approved over 50 per cent hike in electricity tariff payable by customers of the 11 Distribution Companies, DisCos.

Daily Trust reported that a Multi Year Tariff Order (MYTO) signed by the new Chairman of NERC, Sanusi Garba, on December 30, 2020, showed that the new tariff increase took effect on January 1, 2021.

The new increment is coming barely two months after the implementation of the controversial hike proposed last year and this new order supersedes the previous Order NERC/2028/2020.

In the new order, NERC said it considered the “…14.9% inflation rate rise in November 2020, foreign exchange of N379.4/$1 as of December 29, 2020, available generation capacity, US inflation rate of 1.22% and the Capital Expenditure (CAPEX) of the power firms to raise the tariff…”

Unlike the earstwhile order implemented in 2020, which exempted low power consumers, the revised Service Based Tariff (SBT) also saw increase in the rates payable by all classes of electricity users.

The order is effective till June 2021 while a Cost Reflective Tariff (CRT) expected to raise the new cost higher will be activated from June to December 2021.

“This order supersedes ORDER/NERC/ 202B/2020 and shall take effect from January 1, 2021, and shall cease to have effect on the issuance of a new minor review order or an extraordinary tariff review order by the Nigerian Electricity Regulatory Commission (“NERC” or the “commission”).

“The actual average monthly inflation rate of 13.1% for the period January to November 2020 was used for review of the year 2020 tariffs, while, the November 2020 inflation rate of 14.9% as obtained from the NBS was adopted to project Nigerian inflation rates for the year 2021 and beyond.

“In line with the MYTO Methodology, the CBN official exchange rates plus a premium of 1% were used for the retroactive review of the year 2020. Accordingly, average NGN/USD exchange rate (+1%) for the period 1st January 2020 to December 15, 2020, of N360.8 was used to review the year 2020 tariffs. The NAFEX closing NGN/USD exchange rate (+1%) of N397.44 as at December 29, 2020, was adopted to project NGN/USD exchange rate for 2021 and beyond.

“The year 2020 projection on available generation is maintained for the first half (Jan-Jun) of 2021 to account for the impact of the delay in the implementation of MYTO-2020. No change was applied to generation projections from July 2021 and beyond.

“A benchmark gas price of $2.50/MMBTU, gas transportation cost of $0.80/MMBTU and gas prices outside the regulated rates for GenCos with effective gas sale agreements (“GSAs”) were maintained.”

Last December, NERC announced that it had begun a review of the new tariff.

Recall in September 2020 on how a proposed hike was greeted by outrage among Nigerians, including labour unions.

The Nigerian government thereafter suspended the hike, amidst dialogues with stakeholders.

In November, the tariff was eventually implemented while discounts were given for sundry categories of customers.

Meanwhile, the government of Ghana has offered free electricity units to lifeline customers for three months.

Lifeline customers are those who consume less electricity compared to some consumers who use multiple phases.

In a statement on Tuesday, Kwame Agyeman-Budu, managing director of the Electricity Company of Ghana Limited, said the gesture is part of the government’s extended COVID-19 electricity relief.

He said the initiative will absorb 100 percent electricity bills of the lifeline customers from January to March.

“Following the President of Ghana’s directive on the extension of COVID-19 electricity relief for Ghanaians, the Government of Ghana (GG) will continue to absorb 100% electricity bills for lifeline residential customers (those who consume between 0-50kWh) for the stated period of three (3) months (January – March 2021),” Agyeman-Budu said.

“Lifeline customers on both prepaid and postpaid metering systems will continue to benefit from the GoG relief as stated.

“Lifeline prepaid customers: Customers on smart prepaid meters will be automatically credited with their free lifeline units for January, February and March.

“Customers on non-smart prepaid meters will have to swipe or insert their cards in their meters before they visit the vending points to recharge, in order to receive their free units for each month.

“Lifeline Postpaid Customers: With regards to postpaid lifeline customers, their bills for January, February and March 2021 will indicate the GoG absorption of their lifeline consumption.

“Management wishes to assure lifeline customers and stakeholders that it is resolved to implement this directive to the letter. Customers are advised to contact ECG District offices with any challenge for a resolution.”