Nigerians Accumulate N280.98 Billion Debt to DisCos in 9 Months

The subsidy payment is intended to cover the gap between the cost-reflective and allowed tariff

Minister of Power, Mr. Adebayo Adelabu

From January to September 2023, electricity consumers in Nigeria failed to pay N280.98 billion to Electricity Distribution Companies (DisCos), according to an analysis of the Nigerian Electricity Regulatory Commission’s (NERC) quarterly report. The debt is derived from the N1.06 trillion bill issued to consumers during this period.

Breaking down the figures, N112.29 billion represents the amount not paid from the N359.38 billion issued to customers in the first quarter, N86.75 billion from the N354.61 billion bill in the second quarter, and N81.94 billion not paid from the N349.55 billion issued in the third quarter.

The report also reveals that the federal government paid N375 billion as a subsidy during this period due to the absence of cost-reflective tariffs. The subsidy payment is intended to cover the gap between the cost-reflective and allowed tariff, and it is applied to the invoices that Distribution Companies are to pay.

The government incurred a subsidy obligation of N204.5 billion in the third quarter, representing an increase of N69.3 billion (51.30%) compared to the N135.2 billion incurred in the second quarter. The subsidy for the second quarter was an increase of N99.2 billion (275%) compared to the N36.02 billion incurred in the first quarter of 2023.

The report attributes the rise in subsidy payment to the government’s policy of harmonizing Nigeria’s exchange rate. Additionally, none of the four international customer Generation Companies (GenCos) made payments from the cumulative invoice of $11.16 million issued for the services rendered. Similarly, there were no remittances by bilateral customers against the cumulative invoice of N2.81 billion issued to them.

In a related development, the Transmission Commission of Nigeria (TCN) announced a reduction in power supply due to the shutdown of the Egbin Power station, the largest in West Africa, for maintenance work. This three-day maintenance period would result in a reduction of 676MW of bulk power generated into the nation’s grid.

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