The Federal Government is currently subsidizing electricity supply by ₦200 billion monthly, with efforts underway to ensure the subsidies benefit the most vulnerable households, according to Special Adviser to the President on Energy, Mrs. Olu Verheijen.
Addressing concerns over a potential 65% increase in electricity tariffs, Verheijen dismissed the speculation, clarifying that despite the increase in tariffs for Band A consumers last year, the government continues to provide a 35% electricity subsidy.
“It is a misrepresentation of what I actually said in a recent press interview,” she stated. “Following the increase in Band A tariffs in 2024, current tariffs now cover approximately 65% of the actual cost of supplying electricity, with the Federal Government continuing to subsidize the difference.”
Verheijen expressed concerns that a significant portion of the ₦200 billion monthly subsidy disproportionately benefits the wealthiest 25% of Nigerians rather than those in need. To address this, she outlined the government’s multi-faceted strategy to improve electricity supply, ensure effective pricing and metering, and provide targeted subsidies for low-income households.
She emphasized that while long-term reforms aim to establish fairer pricing, the immediate priority is to increase electricity supply, minimize outages, and protect the country’s most vulnerable citizens.
The government’s power sector priorities include a mass rollout of prepaid meters under the Presidential Metering Initiative (PMI), which aims to distribute seven million prepaid meters nationwide starting this year. This initiative is expected to eliminate estimated billing, improve transparency, and enhance revenue collection across the sector, making electricity supply more sustainable.
A new subsidy regime is being developed to ensure electricity subsidies are directed towards low-income households, making power more affordable and accessible for millions of Nigerians.
The government is also prioritizing the settlement of outstanding debts owed to power generation companies, a key factor that has hindered investments in new infrastructure and improved electricity services. Clearing these debts will allow power companies to reinvest in better service delivery and more reliable electricity supply.
To further reduce costs for alternative power sources, the administration is introducing fiscal incentives such as Value Added Tax (VAT) and Customs Duty waivers for Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG).
Verheijen reaffirmed the Tinubu administration’s commitment to power sector reforms that directly impact the daily lives of Nigerians.
“Every policy is designed with the Nigerian people in mind—eliminating unfair estimated billing, ensuring subsidies benefit the right people, and creating the conditions for stable, affordable electricity,” she stated.
These reforms, she noted, are laying the groundwork for expanded access to electricity, improved service delivery, and long-term economic growth for the country.
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