Fakoyejo OlalekanThe National Bureau of Statistics (NBS) data on revenue generated by electricity Distribution Companies (DisCos) showed that Nigerians spent N247.33 billion on power supply in the first quarter (Q1) of 2023.
This surpassed the N204.74 billion the DisCos generated from electricity supply in the corresponding period in 2022, representing a 20.81 per cent increase year-on-year.
Also, the N247.33 billion turnover is more than the N232.32 billion Nigerians spent on power supply in the fourth quarter (Q4) of last year.
“Revenue collected by the DisCos during the period was N247.33 billion from N232.32 billion in Q4 2022,” the NBS report reads.
“On a year-on-year basis, revenue generated in the reference period rose by 20.81 percent from N204.74 billion recorded in Q1 2022,” the NBS report reads.
A broader look into the revenue generated by DisCos from their customers between 2022 to the first quarter of 2023 showed that the highest turnover within the review period was the N247.33 billion recorded in Q1 2023.
Other revenues generated in previous quarters are; N204.7 billion in the first quarter of last year, N188.41 billion in Q2 2022, N202.62 billion in Q3 2022 and Q4 2022 recorded N232.32 billion.
Why did DisCos’ revenue increase?
There are two factors that could have pushed the revenue generated by the distributing companies to N247.33 billion; one being an increase in electricity supply and the other, an increase in customers.
Prime Business Africa gathered that electricity supply had little impact on the revenue growth, as supply depreciated in the first quarter.
The electricity supplied by the distribution companies dropped to 5,852 (Gwh) in Q1 this year, compared to 5,956 (Gwh) supplied in the first quarter of 2022.
But on a quarter-on-quarter basis, the electricity supplied by the DisCos increased from 5,611 (Gwh) reported in the fourth quarter last year.
The statistics bureau disclosed in its report that, “Electricity supply was 5,852 (Gwh) in Q1 2023 from 5,611 (Gwh) in the previous quarter.
“However, on a year-on-year basis, electricity supply declined by 1.74 percent compared to 5,956 (Gwh) reported in Q1 2022,” NBS said.
So, the increase in customer base contributed largely to the revenue growth, as 640,000 clients joined, raising the total number of customers from 10.63 million posted in Q1 last year to 11.27 million in Q1 2023. Also, the total number of customers rose from 11.06 million in the fourth quarter of 2022.
DisCos’ revenue set to rise further amid proposed tariff hike
The increase in revenue might continue into the end of the year, as the Federal Government has concluded a plan to stop subsidising power supply.
Also, the government has proposed a 40 per cent tariff hike starting from 1 July 2023, a move that has attracted criticism from the President of the Nigeria Labour Congress (NLC), Joe Ajaero.
Ajaero described the increase as “insensitive and callous”, however, the power industry stakeholders said the hike is necessary due to soaring inflation, hikes in fuel prices and foreign exchange rates.
Although some industry stakeholders stated that a significant increase will most likely occur in December when the yearly tariff review is done.
The end of the power supply subsidy and increasing electricity tariff will raise the cost of power bought by Nigerians, which in turn, will increase the revenue generated by the DisCos.
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