The Federal Government has advised Nigerians to brace up for an upward adjustment in electricity tariffs as the country moves towards eliminating the unsustainable burden of power subsidies.
Minister of Power, Adebayo Adelabu, issued this warning on Monday during a meeting with the Chairmen of Nigeria’s power generating companies (Gencos) in Abuja.
According to him, the prevailing economic realities no longer support the government’s continued subsidisation of electricity consumption.
“We have to understand that our economy cannot sustain subsidies indefinitely,” Adelabu stated, adding that electricity consumers must begin to pay tariffs that reflect the actual cost of generating and distributing power.
Data from the Nigerian Electricity Regulatory Commission (NERC) for February 2025 shows that the average cost-reflective tariff was N116.18 per kilowatt-hour (kWh), while consumers were charged N88.2/kWh — creating a subsidy gap of N27.97/kWh.
Currently, only about 15 percent of power consumers under Band A are excluded from the subsidy regime, while the remaining 85 percent continue to benefit from government support.
The Minister disclosed that the government owes over N4 trillion to Gencos due to accumulated unpaid subsidies.
He stressed that the payment shortfalls are crippling the power sector’s ability to operate effectively and attract investment.
Adelabu’s media aide, Bolaji Tunji, also quoted him as saying that while the removal of blanket subsidies was imminent, the government would still provide “targeted subsidies for economically disadvantaged Nigerians.”
He further noted that the government is working on mechanisms to ensure that the poorest Nigerians are shielded from the full impact of the planned tariff hike.
The proposed changes are expected to stir debate among stakeholders, especially amid rising inflation and economic pressures facing households across the country.
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