Abuja, Nigeria – May 6, 2025
The Federal Government has announced plans to phase out blanket electricity subsidies, paving the way for higher tariffs that reflect the true cost of power generation across Nigeria.
Minister of Power, Adebayo Adelabu, disclosed this during a meeting with heads of power generating companies in Abuja, stressing that the current subsidy regime has become financially unsustainable.
“Citizens must begin to pay appropriate tariffs,” Adelabu declared, noting that the government owes electricity providers over ₦4 trillion due to unpaid subsidies.
According to the Nigerian Electricity Regulatory Commission (NERC), it costs an average of ₦116 to generate a kilowatt-hour (kWh) of electricity, yet most consumers pay less than ₦90. Only customers in the highest consumption band currently pay full cost-reflective rates.
Adelabu acknowledged the impact the new pricing will have but assured that vulnerable Nigerians will still receive targeted support to shield them from excessive financial strain.
The planned tariff reform signals a major policy shift aimed at rescuing the country’s troubled power sector, which continues to grapple with debts, poor infrastructure, and frequent blackouts.
Analysts say eliminating the subsidy could help attract private investment and improve power reliability, but warn that it must be handled with transparency and strong social protection measures to avoid public backlash.
As the reforms take shape, millions of Nigerians may soon feel the ripple effects on their electricity bills and daily living costs.
