FG to pay N464bn subsidy as DisCos generates N466bn in Q3

The federal government incurred the sum of N464.12bn as subsidy payment in the electricity sector for the third quarter of 2024, a report by the Nigerian Electricity Regulatory Commission showed. The report stated that the sum is due to the absence of cost-reflective tariffs across all DisCos. It said the payment is an increase of […]

The federal government incurred the sum of N464.12bn as subsidy payment in the electricity sector for the third quarter of 2024, a report by the Nigerian Electricity Regulatory Commission showed.

The report stated that the sum is due to the absence of cost-reflective tariffs across all DisCos.

It said the payment is an increase of N84bn, from the N380bn that was paid in the second quarter, adding that the increase in the subsidy obligation of the government is as a result of its policy to freeze allowed tariffs paid by customers despite the increase in the cost-reflective tariffs.

It added that the total revenue collected by all DisCos during the period was N466.6bn out of the N626bn that was billed to their customers.

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This translates to a collection efficiency of 74.55 per cent. In comparison, the total revenue collected by all DisCos in 2024/Q2 was N431.16bn out of the N543.64 billion billed to customers which translated to a 79.31 per cent collection efficiency.

It however said the 74.55 percent collection efficiency recorded was 4.76 per cent lower than the collection efficiency recorded in 2024/Q2 (79.31 per cent).

“Eko and Ikeja DisCos recorded the highest collection efficiencies of 84.40 percent and 83.78 per cent respectively. Conversely, Kaduna DisCo recorded the lowest collection efficiency at 46. 42  per cent. A comparison of DisCos performance shows that only Ibadan and Enugu DisCos recorded improvements in collection efficiency.”

It stated further that the six international bilateral customers being supplied by GenCos in the sector made a payment of $6.49m against the cumulative invoice of $12.19m issued by the Market Operator (MO) for services rendered in 2024/Q3, translating to a remittance performance of 53.24 percent.

“The domestic bilateral customers made a cumulative payment of N1.56bn against the invoice of N2.1bn issued to them by the MO for services rendered in 2024/Q3 translating to 74.57 per cent remittance. It is however noteworthy that some bilateral customers (both domestic and international customers) made payments during 2024/Q3 for outstanding MO invoices from previous quarters. Odukpani-CEET made a payment of $1.33m towards outstanding invoices from previous quarters. Similarly, the MO received N31.51m from the domestic bilateral customers (North-South/Star Pipe; N9.50m and Trans-Amadi, N22m) towards outstanding Invoices from previous quarters.”

It said the Ajaokuta Steel Co. Ltd and the host community did not make any payment towards the N1.26bn and N110m invoices received in 2024/Q3.