The Nigerian Electricity Regulatory Commission (NERC) has applied an exchange rate of N1463.3/$ in calculating the new electricity tariff for Band A consumers in the recent electricity tariff review.
This is according to the revised Multi Year Tariff Order (MYTO) from the NERC to all 11 electricity discos across the country in 2024.
The exchange rate in the reviewed order is significantly higher than the figure applied in calculating the FX rate in the early in January- when the rate stood at N919.38/$. This makes a difference of N543.92 compared to the earlier rate.
The increase in prices is attributed to fluctuations in the foreign exchange market since the start of the year, with the naira experiencing a sharp decline, reaching as high as N1800 in the parallel market by March.
In recent weeks, however, the naira has seen a significant recovery, dropping to below N1300 in the parallel market, thanks to the Central Bank of Nigeria’s (CBN) implemented reforms.
These reforms from the apex bank include raising the interest rate to 24.75%, providing foreign exchange to Bureaux de Change (BDCs) at a set rate, and imposing restrictions on international oil companies, limiting their ability to repatriate 100% of their foreign exchange earnings immediately.
The Nigerian Electricity Regulatory Commission (NERC) has incorporated the new domestic gas price of $2.42/MMBTU, set by the Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA), as a key factor in determining the updated electricity tariff for Band A consumers.
Nairametrics earlier reported the Nigerian Electricity Regulatory Commission (NERC) increase of the electricity tariff for Band A consumers from N68/KWh to N225 per Kilowatts hour.
The commission had stated that the hike only affected around 15% of the total electricity consumers in the country who enjoy around 20hrs of electricity daily.
Prior to the NERC’s increase of electricity tariff for the Band A consumers, the Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA) had earlier increased the base price for domestic gas supply to power companies across the country from $2.19/ MMBTU to $2.42/MMBTU.