Government Spends N375.8bn on Electricity Subsidy as Consumers Contribute N782.6bn in Nine Months

New details have revealed that the government paid N375.8 billion in electricity subsidies during the first nine months of this year.

While beleaguered consumers, grappling with blackouts and rising costs paid N782.6 billion for electricity during the same period.

This was disclosed in the Nigerian Electricity Regulatory Commission report.

A breakdown of the report showed in the first quarter of the year, the government paid N36 billion and N135.2 billion in the second quarter while in the third quarter, another N204.6 billion was paid.

These subsidies emerged against the backdrop of a lack of cost-reflective tariffs, pushing the government to bridge the widening gap between actual costs and permitted tariff rates.

Consumer payments, however, tell a tale of their financial struggle as power distribution companies billed users a cumulative N1.06 trillion throughout the nine months.

Despite the high bills and numerous power outages, consumers managed to remit N782.6 billion, emphasizing the sheer financial strain borne by ordinary Nigerians.

The subsidies, a consequence of tariff misalignment, have become a contentious issue, prompting calls for greater transparency in the process.

Critics argue that a lack of clarity and a transparent framework surrounding the subsidy mechanism muddle the discourse around the true financial dynamics.

Chijioke James, President of the Electricity Consumers Association of Nigeria, claims that the government-paid subsidy is not clear.

He said, “The subsidy that they say the government is paying is not clear. There is no clarity on how the government pays this subsidy. If we had a transparent process, everybody would see the volume of commitment that the government is making and would be able to appreciate it.

“We are more concerned about the transparent process of what constitutes the subsidy and the tariff regime. If we had a transparent process, we would do a cost-benefit analysis, all the stakeholders would know how to make sure that everybody is carried along in a fair and equitable.”