How Much Is a Unit of Electricity in Nigeria? Guide for 2025

In Nigeria, the cost of electricity is a pressing concern for households, businesses, and industries alike. As the nation grapples with an evolving energy sector, understanding the price of a unit of electricity—measured in kilowatt-hours (kWh)—is essential for effective budgeting and energy management. We provide a comprehensive analysis of the current electricity tariffs in Nigeria, exploring variations across tariff bands, distribution companies, and influencing factors, all tailored to the landscape of April 2025.

Current Electricity Tariff Rates in Nigeria

The Nigerian Electricity Regulatory Commission (NERC) oversees electricity pricing, which varies based on consumer categories and service levels. As of April 2025, tariffs are structured into bands—Band A through Band E—reflecting the hours of daily power supply:

• Band A (20+ hours): ₦229 per kWh
• Band B (16–20 hours): ₦68–₦80 per kWh
• Band C (12–16 hours): ₦55–₦65 per kWh
• Band D (8–12 hours): ₦40–₦50 per kWh
• Band E (4–8 hours): ₦25–₦35 per kWh

For Band A customers, who enjoy the most consistent supply, the rate surged from ₦206.80 in March 2025 to ₦229 following a recent adjustment by NERC, reflecting efforts to reduce subsidies. Meanwhile, residential users in lower bands pay significantly less, though supply reliability diminishes accordingly. Commercial and industrial consumers often face higher rates, ranging from ₦70 to ₦120 per kWh, depending on usage and Disco-specific tariffs.

How Tariffs Vary Across Distribution Companies

Nigeria’s electricity distribution is managed by 11 Distribution Companies (DisCos), each with slight pricing variations due to operational costs and regional factors. Here’s a snapshot of typical unit costs for residential Band A customers:

• Ikeja Electric (IKEDC): ₦229 per kWh
• Eko Electricity Distribution Company (EKEDC): ₦228.50 per kWh
• Abuja Electricity Distribution Company (AEDC): ₦229 per kWh
• Port Harcourt Electricity Distribution Company (PHEDC): ₦227.80 per kWh
• Enugu Electricity Distribution Company (EEDC): ₦229 per kWh

These rates, updated in March 2025, reflect NERC’s latest Multi-Year Tariff Order (MYTO). DisCos like Jos Electricity Distribution Company (JEDC) and Kaduna Electricity Distribution Company (KEDC) may charge slightly lower rates in lower bands due to higher transmission losses in northern regions, averaging ₦25–₦60 per kWh.

Calculating Units Purchased with Common Amounts

To illustrate, we calculate how many units of electricity common payment amounts buy under Band A (₦229/kWh):

• ₦1,000: 4.37 units
• ₦5,000: 21.83 units
• ₦10,000: 43.67 units

For Band C (e.g., ₦60/kWh):

• ₦1,000: 16.67 units
• ₦5,000: 83.33 units
• ₦10,000: 166.67 units

This disparity highlights the cost burden on Band A users versus the value lower bands receive, albeit with less reliability.

Factors Influencing Electricity Unit Costs

Several dynamics shape the cost of a unit of electricity in Nigeria:

• Exchange Rate Volatility: With gas and equipment costs tied to the U.S. dollar, the Naira’s value—currently ₦1,600 to $1—drives up tariffs. In 2023, Band A rates were ₦66/kWh at ₦460/$1, a stark contrast to today.
• Fuel Costs: Over 70% of Nigeria’s power comes from gas-fired plants. A recent 11% gas price hike to $2.42 per MMBTU (₦3,872) directly impacts tariffs.
• Subsidy Reductions: The government’s push to eliminate subsidies, costing ₦3.3 trillion annually, has shifted more expenses to consumers, particularly Band A.
• Infrastructure Losses: Transmission and distribution losses, averaging 20–30%, inflate costs passed to end-users.

Prepaid vs. Postpaid: Impact on Unit Cost Perception

Most Nigerians use prepaid meters, allowing direct purchase of units. A ₦5,000 recharge on a Band A meter yields 21.83 units, consumed based on appliance usage (e.g., a 100W bulb uses 0.1 kWh/hour). Postpaid users, billed monthly, often face estimated billing—sometimes exceeding actual consumption—ranging from ₦20,000 to ₦50,000 for moderate households, translating to 87–218 units at Band A rates.

Regional Cost Variations

Electricity costs differ by region due to Disco efficiency and supply hours:

• Lagos (IKEDC/EKEDC): High Band A rates (₦229) reflect robust infrastructure but burden urban users.
• Abuja (AEDC): Similar pricing (₦229) with better supply consistency.
• North (JEDC/KEDC): Lower rates (₦25–₦60) but frequent outages increase reliance on generators.
• South-South (PHEDC): Rates near ₦228 with variable supply quality.

Rural areas often fall into Bands D and E, paying less per unit but facing significant access challenges.

Comparing Nigeria’s Electricity Costs Globally

At ₦229/kWh ($0.14 USD), Nigeria’s Band A rate exceeds many African peers—Kenya ($0.12/kWh), Ghana ($0.10/kWh)—but remains below developed nations like the UK ($0.30/kWh). However, lower bands (₦25–₦60, or $0.02–$0.04) align with regional averages, though supply inconsistency offsets this advantage.

Strategies to Optimize Electricity Spending

We offer actionable steps to manage costs:

• Switch to Energy-Saving Appliances: LED bulbs (10W) vs. incandescent (60W) save 0.05 kWh/hour.
• Monitor Usage: Prepaid meter apps track consumption, helping adjust habits.
• Bulk Purchases: Buying units during stable rate periods avoids sudden hikes.
• Solar Alternatives: A 1kW solar system (₦800,000 initial cost) offsets grid reliance long-term.

Economic Implications of Current Tariffs

The ₦229/kWh Band A rate translates to ₦170,000 monthly for a household using 743 units—up from ₦50,000 at previous rates. Small businesses face ₦200,000–₦500,000 bills, driving inflation and operational costs. We see this as a catalyst for renewable energy adoption, with solar installations rising 15% in 2024 per industry reports.

Read also: How Much is a Generator in Nigeria? The Ultimate Price Guide for 2025

Government Policies and Future Trends

NERC’s 2025 tariff review aims for cost-reflectivity, targeting ₦215–₦250/kWh across bands by 2030. The Siemens power project, set to add 7,000 MW by 2026, could stabilize supply and moderate prices. We anticipate subsidies phasing out entirely by 2027, per World Bank recommendations, potentially raising average rates to ₦150/kWh.

Why Understanding Unit Costs Matters

For Nigerians, knowing the cost per unit of electricity empowers budgeting and advocacy for better service. With Band A at ₦229/kWh, a family’s ₦10,000 recharge lasts a week with moderate use, while Band C users stretch it to a month. This knowledge drives efficiency and informs policy feedback to NERC and DisCos.

Conclusion: Navigating Nigeria’s Electricity Costs

The unit cost of electricity in Nigeria—ranging from ₦25 to ₦229 per kWh—reflects a complex interplay of policy, economics, and infrastructure. We affirm that while Band A users bear the highest burden, lower bands offer affordability at the expense of reliability. By leveraging technology, planning purchases, and exploring alternatives, Nigerians can mitigate these costs. For the latest updates, visit NERC’s official site.

Read also: How Much Is Solar Inverter in Nigeria? A Comprehensive Guide to Prices and Options in 2025