Electricity tariff hike imminent as Gencos step up pressure

Reports today, Tuesday, April 7, 2026, indicate that a fresh electricity tariff hike is likely as Power Generation Companies (GenCos) ramp up pressure on the Nigerian Electricity Regulatory Commission (NERC) to adjust rates following a recent increase in gas prices.

The Catalyst: Rising Gas Prices
The immediate pressure stems from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) raising the domestic base price of natural gas for power generation.

New Price: Effective April 1, 2026, the price rose to $2.18 per MMBtu, up from $2.13.

The "Pass-Through" Argument: The Association of Power Generation Companies (APGC) argues that since gas is a "feedstock," any increase in its cost must be transparently reflected in the final electricity tariff paid by consumers.

Regulatory Delay: Dr. Joy Ogaji, CEO of the APGC, stated that operators are less concerned about the gas price hike itself and more worried about "regulatory delays" in adjusting tariffs to bridge the gap.

Financial Crisis in the Power Sector
The push for a hike is set against a backdrop of massive liquidity issues:

Outstanding Debt: GenCos claim the Federal Government owes them approximately ₦6.5 trillion.

Disputed Settlement Plan: While President Tinubu recently approved a ₦3.3 trillion plan to settle legacy debts (covering 2015–2025), GenCos have already questioned the transparency of this figure, claiming it does not align with previously reconciled industry records.

Inconsistent Payments: Operators highlight that even when prices were lower, a significant percentage of invoices remained unpaid, deterring much-needed investment in the grid.

Potential Impact on Consumers
If NERC yields to the pressure, it could lead to another significant jump in tariffs, following the major Band A price hike in 2024 that saw rates for high-supply areas rise from ₦66 to over ₦206/kWh.

Inflationary Pressure: Small businesses and the hospitality sector have already warned that they cannot absorb further energy cost increases without passing them on to customers or facing closure.

Current Status: NERC has not yet issued a formal order for a general tariff review for April 2026, but stakeholders at the recent Nigerian Electricity Supply Industry (NESI) meeting in Lagos noted that "market realities" make an adjustment difficult to avoid.

Timeline of Recent Developments

April 1, 2026 Gas price for power generation officially increases to $2.18/MMBtu.
April 5, 2026 Presidency announces ₦3.3 trillion debt settlement plan.
April 7, 2026 GenCos publicly challenge the debt figures and demand tariff reviews.