• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Economy Macros

Inflation rate, yet to factor in rise in higher electricity prices

Research Team by Research Team
December 20, 2020
in Macros
Electricity tariff
Share on FacebookShare on TwitterShare on Linkedin

The recent hike in electricity prices is yet to be factored into the consumer price index which measures the inflation rate. The National Bureau of Statistics revealed inflation rate for the month of November 2020 was 14.89%.

According to reliable sources involved in the collation of the inflation rate data, electricity price increased could not have been captured in the basket of goods and services as most electricity consumers started paying the new tariffs in December and not in November when the new prices kicked in.

READ: NBS hits back at Prof Hanke, says Nigeria’s inflation is not 33%

RelatedStories

TCN restores bulk power supply to Eko, Ikeja DisCos after repairs on 330kV line

Sokoto, Kebbi, Zamfara residents call for reduction in soaring electricity, telecom tariffs

March 19, 2025
electricity tariff

FG set to transition to cost-reflective tariffs in Nigeria’s power sector

February 1, 2025

November inflation rate of 14.89% up 1.6% compared to the previous month (October). Even though the month-on-month inflation rate of 1.6% is the highest recorded in over a year, analysts still believe it should have been higher if the impact of the higher electricity prices were factored into the latest numbers.

Electricity Price Increases – The Nigerian Electricity Regulatory Commission (NERC) issued an order that electricity prices will increase starting September 1st, 2020. But following the threat by labour to go on strike, the government and the unions reached an agreement to suspend the strike. After many deliberations, prices were allowed to increase starting on November 1st, 2020. The government also agreed to a discount of 10% that expires on January 1st, 2020.

READ: Agro Centric Kogi State is state with highest food inflation rate in Nigeria @24.3%

According to Nairametrics Research, Electricity prices for consumers increased by an average of over 100% on paper (not accounting for tariff freezes).

Eko Disco – Weighted Tariff average was about N30/kWh and jumping to N49/kWh – 63%

Ikeja Disco – Weighted Tariff average was about N28/kWh and jumping to N47/kWh – 67.8%

Abuja Disco – Weighted Tariff average was about N36/kWh and jumping to N57/kWh –  58.3%

READ: Buhari moves against DISCOs that collect money for prepaid meters

Important to note that these are weighted averages. For some residential customers in the Band A tariff (having 20 hours daily average power supply) they could see their tariff rise as much as 125% while customers with less than 12 hours average power supply will not experience an increase.

Why it is not factored in

Nairametrics understands the prices of goods and services used to measure the impact of inflation are drawn from the actual spending of consumers in the month under review compared to what they spent in prior months.

As mentioned earlier, the inflation rate for the month of November of 14.89% fell below most consensus expectations. Nairametrics team of analysts projected an inflation rate slightly higher than 15% on the back of higher electricity prices.

READ: Minister discloses major driver of inflation rate in Nigeria

However, because electricity prices for most post-paid consumers are paid in arrears, they will not experience the increase in spending until December 2020 when they actually start paying the bills. It is after that the full impact of electricity prices will be felt in the consumer price index data.

Thus, by the second week of January when December inflation numbers will be revealed, we expect to see an inflation rate closer to 16% for the month of December 2020.

READ: CBN Governor alleges parallel market used for bribes and corruption

Why this matters

The inflation rate is a significant index in the economy affecting a wide range of transactions from contract pricing to even the value of the exchange rate.

  • A higher inflation rate due to increased electricity prices is bound to impact Core inflation (which excludes food inflation).
  • Core inflation, the metric often used by most industries is at 10% and much lower than the wider All Items inflation rate of 14.89% because it eliminates the galloping food inflation.

Inflation stats

All items inflation – 14.89%

Food Inflation – 18.3%

All items less food inflation – 11.05%

All items less food and energy – 11.6%

What they are saying

The Central Bank of Nigeria in its latest monetary policy committee meeting blamed the rising inflation rate on supply-side factors such as insecurity, logistics gridlocks, and also increase in electricity prices.

“The Committee noted that inflation continued to be driven by supply side disruptions arising from the COVID-19 pandemic and other legacy factors. Key amongst these are: the security challenges in parts of the country; increase in food prices; and the recent hike in pump price of PMS and electricity tariff. The MPC, therefore, emphasized the need to address structural supply side issues putting upward pressure on costs of production and unemployment.”

Whilst the majority of electricity consumers did not experience higher electricity bills payment in November, prepaid customers did experience as they will be expected to pay the most recent tariff since they pay in advance and not in arrears. However, less than 40% of consumers are metered in Nigeria.


Follow us for Breaking News and Market Intelligence.
Tags: Business NewsElectricity tariffsFeaturedNigeria News
Research Team

Research Team

The Research Team at Nairametrics meticulously monitors, gathers, curates, and administers an extensive repository of both macroeconomic and microeconomic data originating from Nigeria and across Africa. Utilizing a variety of presentation formats—including documents, tables, and charts—our analysts disseminate key findings through the Nairametrics platform. Additionally, we regularly release insightful, research-driven articles that offer in-depth analyses of economic trends and indicators.

Related Posts

TCN restores bulk power supply to Eko, Ikeja DisCos after repairs on 330kV line
Energy

Sokoto, Kebbi, Zamfara residents call for reduction in soaring electricity, telecom tariffs

March 19, 2025
electricity tariff
Energy

FG set to transition to cost-reflective tariffs in Nigeria’s power sector

February 1, 2025
Power generation: Only 25 of 160 licensed GenCos operating- APGC
Energy

Aba DisCo announces over 50% increase in electricity tariffs, customers protest 

January 6, 2025
DisCos can charge users based on actual consumption during tariff increases – expert
Energy

DisCos face billions in losses as manufacturers insist on paying old tariffs

May 30, 2024
NLC, TARIFF
Energy

NLC to picket NERC, DisCos’ offices nationwide on Monday over electricity tariff increase

May 9, 2024
Mr. Olabode Sowunmi, Electricity
Energy

“Set aside politics, the Nigerian power sector is operating at a loss”- Sowunmi

April 27, 2024
Next Post
Lagos task force shuts down Cubana nightclub, other facilities for defying Sanwo-Olu’s order

Lagos task force shuts down Cubana nightclub, other facilities for defying Sanwo-Olu's order

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

first bank








DUNS

Recent News

  • Nigeria’s capital importation fell sharply under Buhari, FPI peaked and crashed, FDI persistently weak despite reforms 
  • Alleged N110.4 billion Fraud: Court rules  Yahaya Bello’s international passport not in its custody
  • NELFUND to launch job portal linking student loan beneficiaries to employers by 2026 

Follow us on social media:

Recent News

Buhari’s administration created 10 new passport offices-NIS

Nigeria’s capital importation fell sharply under Buhari, FPI peaked and crashed, FDI persistently weak despite reforms 

July 17, 2025
Federal High Court, REA

Alleged N110.4 billion Fraud: Court rules  Yahaya Bello’s international passport not in its custody

July 17, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics