Nigerian DISCOs bank ₦100 billion in March amid tariff hike and energy struggles
In a significant financial development, Nigeria’s power distribution companies (DISCOs) have reported a remarkable revenue surge, generating ₦100 billion in March 2024. This substantial increase follows a recent tariff hike and comes despite a notable decline in power generation, attributed to gas shortages impacting electricity generating companies (GENCOs). The resulting earnings growth highlights both the financial potential and operational challenges faced by the nation’s energy sector.
Revenue Trends Amid Tariff Hike
The earnings of Nigerian DISCOs have seen a progressive rise from ₦95 billion in January 2024 to ₦100 billion in March 2024, culminating in a total revenue of ₦292 billion for the first quarter of the year. This increase in revenue is directly linked to the recent tariff adjustments implemented by the DISCOs, which have been a subject of both economic analysis and public discourse.
Breakdown of Revenue by DISCOs
Eight DISCOs notably recorded significant revenue increases in March 2024:
– Ikeja DISCO emerged as the top earner with a revenue of ₦20 billion.
– Eko DISCO and Abuja DISCO each reported revenues of ₦16.7 billion.
– Ibadan DISCO generated ₦10 billion.
– Benin DISCO collected ₦7.5 billion.
– Enugu DISCO earned ₦6.9 billion.
– Geometric Power (Aba Power), a newcomer, contributed ₦1.1 billion.
– Yola DISCO added ₦1.5 billion to the collective earnings.
Operational Challenges
Despite the financial upswing, the period was marred by operational setbacks, particularly in power generation. The decrease in power output was largely due to gas shortages as gas companies halted supplies to GENCOs over unpaid debts. This disruption underscores the fragility of Nigeria’s power infrastructure and the inter dependencies within the sector.
NERC Data Insights
According to data from the Nigerian Electricity Regulatory Commission (NERC), power supply to DISCOs was recorded at 2,577 gigawatt-hours (GWh) in January 2024, with 2,072 GWh billed. The billing efficiency for January stood at 80%, with total billing pegged at ₦130.9 billion and revenue collection at ₦95 billion, representing a 72% collection efficiency.
In February 2024, there was a noticeable dip in power supply, with DISCOs receiving 2,149 GWh and billing 1,759 GWh. The billing charges amounted to ₦113 billion, from which ₦97 billion was collected.
March saw a rebound in total energy received, standing at 2,468 GWh, of which 1,975 GWh was billed. The total billing for March was ₦126.5 billion, with revenue collections hitting the ₦100 billion mark.
Impact of Tariff Hike
The recent tariff hike has played a pivotal role in the revenue increment. While the higher tariffs have spurred financial growth for the DISCOs, they have also sparked consumer concerns amid the backdrop of inconsistent power supply. The balance between sustaining operational viability and ensuring consumer affordability remains a delicate one.
Industry Reactions and Future Outlook
Industry stakeholders have reacted to the revenue figures with a mix of optimism and caution. The financial gains signal a potential for improved infrastructure investment and service delivery. However, the persistent issues of power generation, supply inconsistencies, and gas shortages pose ongoing challenges that require strategic intervention.
