President Muhammadu Buhari has finally approved the official implementation of cost-reflective tariffs for the Nigerian Electricity Supply Industry.
The new tariff, which will now formally commence on September 1, 2020, was one of the preconditions given by the World Bank for a $1.5bn loan for Nigeria.
Other preconditions include the removal of fuel subsidy and unification of exchange rate, which the Central Bank of Nigeria is implementing.
In January, the Nigerian Electricity Regulatory Commission had announced that there would be an upward review of electricity tariffs across the country from April 1.
However, this was suspended after reports indicated that electricity distribution companies had pushed for a postponement until key areas of disagreement were sorted.
The National Assembly in June persuaded the DisCos to defer the plan till the first quarter of 2021 because of the COVID-19 pandemic on energy consumers.
It was gathered that Buhari set up a committee earlier this month to look at the issues in the Nigerian electricity supply industry and come up with a report on the tariff structure among other recommendations.
The committee was given two weeks to conclude its job due to the urgency involved and was chaired by a former Managing Director of Guaranty Trust Bank, Mr Fola Adeola.
Aside from the former top banker, other members of the committee included Prof Charles Soludo and Dr Doyin Salami among others.
According to the new tariff via a NERC order dated December 31, 2019, Abuja Electricity Distribution Company residential customers R3 that were paying N27.20 per unit will now pay N47.09 and N63.42 by next year.
For the Ikeja Electricity Distribution Company customers, the R3 category paying N26.50 per unit will now pay N36.49 per unit and later N58.