The Nigerian Electricity Regulatory Commission (NERC) has announced a significant reduction in the exchange rate used for calculating electricity tariffs, providing relief for Band A customers. The exchange rate adjustment, reflected in NERC’s Multi Year Tariff Order (MYTO) for May to December 2024, marks a proactive response to recent fluctuations in the foreign exchange market.
Effective from May to December 2024, NERC has decreased the exchange rate for Band A customers by 16.03%, from N1,463.3/$ to N1,277.8/$. This adjustment translates to a reduction in the electricity tariff from N225 per kWh to 206.8 per kWh, representing an 8.1% decrease for Band A customers.
This move follows NERC’s recent approval of a substantial hike in electricity tariff for Band A customers, which garnered attention last month. The initial tariff increase of over 200%, from approximately N66 per kWh to N225 per kWh, raised concerns among consumers. However, the latest adjustment in the exchange rate aims to mitigate the financial burden on electricity consumers, particularly Band A customers.
In addition to the exchange rate revision, NERC has made slight adjustments to other parameters used in determining the new tariff. Notably, Nigeria’s inflation rate has been updated to reflect the latest figures of 33.2%, up from the previously used rate of 31.7%. These refinements ensure that the tariff structure aligns with current economic realities while maintaining fairness and transparency in pricing.
