FG to pay N633.3bn subsidy as DisCos made N291.6bn revenue in Q1 2024

The federal government accumulated N633.30 billion as electricity subsidy in the first quarter of 2024 despite the 11 electricity Distribution Companies (DisCos) receiving N291.6 billion from the N368.6 billion they charged their customers. Daily Trust reports that the subsidy was generated before the government increased the price of electricity for Band A customers in April. […]

The federal government accumulated N633.30 billion as electricity subsidy in the first quarter of 2024 despite the 11 electricity Distribution Companies (DisCos) receiving N291.6 billion from the N368.6 billion they charged their customers.

Daily Trust reports that the subsidy was generated before the government increased the price of electricity for Band A customers in April.

The figure was contained in the Q1 report of the Nigerian Electricity Regulatory Commission (NERC). The report stated that the electricity subsidy was 90.57 per cent of total NBET invoice in 2024/Q, with the government paying an average of N211.10bn.

It stated that the figure was a 150.56 per cent increase (N380.56bn) compared to the N252.7bn the government incurred in 2023/Q4.

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The statement reads in part, “This increase is largely attributable to the government’s policy to harmonise exchange rates while also issuing a policy directive that end-user customer tariffs remain at the rates that came into effect in December 2022.”

The report also showed that total revenue collected by all DisCos was N291.62bn out of the N368.65bn that was billed to customers.

The statement further reads: “This translates to a collection efficiency of 79.11 per cent. In comparison, the total revenue collected by all DisCos in 2023/Q4 was N294.95bn out of the N399.6bn billed to customers which translated to a 73.79 per cent collection efficiency.”

It noted that Ikeja and Eko DisCos recorded the highest collection efficiencies of 103.61 per cent and 86.24 per cent respectively, while Yola DisCo recorded the lowest collection efficiency of 43.03 per cent.

It adds: “A comparison of DisCos performance in 2023/Q4 and 2024/Q1 showed that 10 DisCos recorded improvement in collection efficiency in 2024/Q1 when compared to 2023/Q4 with…DisCo recording the highest increase of +13.99pp. Only Ibadan DisCo recorded a decline (-0.70pp) in collection efficiency during the period.”

It further said that none of the four international bilateral customers serviced by the market operator made any payment against the $14.19m invoice issued to them for services rendered, as well as bilateral customers within the country, with a cumulative invoice of N1.8bn.