Power distribution companies (DisCos) in Nigeria are grappling with significant financial losses as manufacturers continue to pay old tariff rates instead of the newly approved rates set by industry regulators.
The Manufacturers Association of Nigeria (MAN) has directed its members nationwide to persist with the previous rate of N66/kWh while awaiting a resolution of their petition to the National Electricity Regulatory Commission (NERC).
NERC had approved the new tariff to address financial instability and the mounting losses faced by DisCos due to the absence of a cost-reflective tariff in the power sector.
Minister of Power Adebayo Adelabu previously indicated that the federal government was subsidizing approximately 67% of the power sector, with subsidies expected to reach N2.9 trillion by the end of 2024.
The report also noted that about 52% of electricity costs would not be subsidized monthly, as the government has significantly reduced electricity subsidies.
With MAN’s refusal to pay the new tariff, DisCos are anticipated to incur further losses in the upcoming months.
According to the latest NERC report, DisCos’ revenue collections amounted to N294.95 billion out of the N399.69 billion billed to customers in the fourth quarter of 2023, reflecting a total loss of N105.1 billion.
