The Nigerian federal government reportedly expended N375.8 billion on electricity subsidies from January to September this year, while power consumers paid a total of N782.6 billion for electricity during the same period.

Data from the Nigerian Electricity Regulatory Commission (NERC), a federal agency, revealed that the government subsidized electricity in all three quarters of 2023.

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Power distribution companies billed a nationwide total of N1.06 trillion during the nine-month period, collecting N782.6 billion despite widespread blackouts.

Subsidy payments were N36 billion in the first quarter, rising to N135.2 billion in the second quarter and further increasing to N204.6 billion in the third quarter. The figures for the fourth quarter are pending.

The NERC’s just-released third-quarter 2023 report attributed the subsidy to the absence of cost-reflective tariffs.

Due to this shortfall, the government incurred a subsidy obligation of N204.59 billion in 2023/Q3, a 51.3% increase from N135.23 billion in 2023/Q2.

The rise was largely attributed to the government’s policy to harmonize exchange rates.

Consumers paid electricity bills totaling N782.56 billion during the three quarters, while distribution companies billed N1.06 trillion.

Collection efficiency increased to 76.56%, with a total revenue of ₦267.61 billion collected by all distribution companies in 2023/Q3 out of ₦349.55 billion billed.

Despite the overall positive performance, the NERC reported a decrease in trading activity during the week, with a total turnover of 1.882 billion units of shares valued at N31.630 billion in 33,020 deals, compared to the previous week’s total of 2.423 billion shares valued at N45.070 billion in 34,704 deals.

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For the fourth quarter, analysts anticipate market reactions to the recently released inflation figure of 28.20% for November and investor positioning ahead of corporate earnings reports.

The president of the Electricity Consumers Association of Nigeria, Chijioke James, emphasized the need for transparency in the subsidy process and tariff regime.