Electricity tariff increase likely as gas-to-power price rises by 11%

Electricity tariff increase likely as gas-to-power price rises by 11%

Electricity distribution companies (DisCos) may be forced to increase their tariff following the increase in gas to power price by about 11 per cent.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) gave the new price of natural gas for power generation companies as $2.42 per metric million British thermal units (MMBTU). It was previously $2.18/MMBTU.
The agency announced the new domestic base price and wholesale prices of natural gas for 2024 in a statement on Monday.
The domestic base price is the minimum amount at which natural gas can be sold to the domestic market.
The review, which is a raise from the previous rate of $2.18 MMBTU, could lead to a tariff hike as Nigeria generates over 70 percent of its electricity from power plants powered by gas.
The NMDPRA also pegged the cost of commercial gas at $2.92mmbtu, up from the previous cost of $2.5mmbtu. The announcement was signed by the Chief Executive, NMDPRA, Farouk Ahmed.
The adjustment came amid calls by oil and gas companies for a migration to cost-reflective tariffs to attract investment.
President Bola Tinubu has insisted that a stable electricity supply must be achieved before the implementation of a cost-reflective tariff, according to Minister of Power, Adebayo Adelabu.

There was a move recently to jerk up the electricity tariff but the Presidency had to step in to halt it.

Currently, the tariff is said to be subsidised by the Federal Government.