What you need to know about the new electricity tariff in Nigeria

As seen in recent news, the implementation of a new electricity tariff plan by Electricity Distribution companies has commenced. This, definitely, affects most electricity consumers and retailers.

So, we at osunmall.com.ng are bringing you all the details of this new electricity tariff. We hope this article will be truly helpful as we explore how it all started, and what the current status is.

Important: This is a topic that affects virtually every Nigerian. Please, endeavor to share on your various social media platforms.

The beginning…

In 2019, the federal government allocated 7% of its annual budget ( N560 billion) as subsidy for electricity tariff. With the analysis from the world bank, it was gathered that over the last five years, over N1.7 trillion has gone into subsidizing electricity tariff. The senate president argued that the current quality of energy hasn’t significantly improved in the last ten years.

As a result, it was agreed that the amount used in subsidizing electricity could be channeled in improving other sectors like health care and education.

Initially, a 50% increase in electricity tariff for Nigerians was scheduled to start on 1st of April 2020. However, the Nigerian Electricity Regulation Commission (NERC) went on a public consultation to see if it was a viable solution. During this period, consumers agreed to pay this tariff only if they got a certain high quality of service. Which has inspired the current type of tariff plan.

On September 1st 2020, the electricity distribution companies (Discos) started implementing the new electricity tariff plan.

What is the new electricity tariff plan?

The new electricity tariff plan is a service reflective tariff structure which was mandated by the Nigerian Electricity Regulatory Commission (NERC).

This means that there’ll be a change in the electricity terms, service, and charges for Nigerians who use electricity based on the quality and hours of electricity received.

How does this work?

First off, this new tariff is applicable to all the distribution companies in Nigeria. And although the terms are slightly different with each disco, all Band A, B and C users will experience an increase in electricity cost.

Band users who fall under this category consume more than 50kWh every month and a minimum of 12 hours of electricity every day.

Band D and E users will not be experiencing an increase until there’s an overall improvement in the quality of service they receive and the number of hours they have electricity for.


Band A 20 hours & above YES
Band B 16 hours & above YES
Band C 12 hours & above YES
Band D 8 hours & above PENDING
Band E 4 hours & above PENDING

Tip: To know exactly what Band category you are in, kindly reach out to your electricity distribution company (e.g AEDC).

Why is a new tariff plan needed?

It is expected that this new plan will force the increased quality of electricity service, improve the number of hours electricity is given, and also hasten the speedy delivery of prepaid meters to customers.

Currently, a number of distribution companies have started operating on the new tariff plan. While other discos are still waiting on the new rates approval from NERC.