The Federal Government of Nigeria is set to raise electricity tariffs by more than 66%, from N116.18 to N193.63 per kilowatt-hour, a move that has sparked strong opposition from consumers across the country.
Olu Verheijen, the Special Adviser to President Bola Tinubu on Energy, recently confirmed the planned hike, stating that the price increase is essential for aligning electricity rates with the cost of power supply. According to Verheijen, higher tariffs are necessary to fund critical maintenance, improve grid reliability, and attract private investment into Nigeria’s power sector. The increase is expected to be implemented within the coming months.
Verheijen emphasized that the tariff adjustments will require balancing subsidies for lower-income consumers to mitigate the impact on vulnerable populations. She also highlighted the need for a cost-efficient and cost-reflective tariff system that would allow the electricity sector to generate the revenue required to support its growth and improve service delivery.
“One of the key challenges we’re looking to resolve over the next few months is transitioning to a cost-efficient but cost-reflective tariff,” Verheijen said at the Mission 300 Energy Summit in Dar es Salaam, Tanzania. “This is needed to generate revenue required to attract private capital, while also protecting the poor and vulnerable.”
The Nigerian power sector, with an installed capacity of 14 gigawatts (GW), currently struggles to transmit 8GW nationwide, and only 4-5GW can be delivered directly to homes and businesses. This limited capacity, coupled with ongoing grid failures, has led to severe power shortages in many areas.
A senior official from the Nigerian Electricity Regulatory Commission (NERC) confirmed that all electricity customers, except those on Band A, should prepare for the tariff increases. This shift is driven by the unsustainable burden of electricity subsidies on the government. The official noted that failure to meet subsidy payments to the Distribution Companies (DisCos) is affecting sector liquidity.
“We can no longer shoulder the responsibility of paying subsidies. It is no longer sustainable,” the official stated. “All customers should expect new tariffs soon.”
The call for a cost-reflective tariff has also been supported by electricity distribution companies, which have expressed frustration over the government’s failure to honor its subsidy promises. According to Sunday Oduntan, the Executive Director of Research and Advocacy at the Association of Nigerian Electricity Distributors, consumers in Bands B to E are subsidized by the government, which currently covers about 67% of their electricity costs.
“Only Band A customers pay the true cost of electricity, while the government subsidizes the rest,” Oduntan said. “The government has continually failed to fulfill its promises, and this has resulted in mounting debt.”
Despite these concerns, the government remains adamant that a tariff adjustment is necessary to attract private investment and improve the power sector. Minister of Power Adebayo Adelabu has also pointed to the challenges faced by DisCos, which have called for the increase to help stabilize the sector’s finances.
However, consumers have voiced strong opposition to the planned tariff hikes. Adeola Samuel-Ilori, Coordinator of the Electricity Consumers Protection Forum, criticized the government for raising tariffs before ensuring that all customers are properly metered, as stipulated by the Electricity Act. Samuel-Ilori called for the enforcement of laws requiring DisCos to provide meters to customers at no charge, adding that the government’s failure to do so amounts to double jeopardy for consumers.
“The DisCos are profiting while customers continue to bear the cost of meters,” Samuel-Ilori argued. “If the government insists on raising tariffs, it must also ensure that meters are provided as required by law.”
Princewill Okorie, Executive Director of the Consumer Protection Advocacy Centre, also condemned the tariff increase, accusing the government of exacerbating the economic struggles of Nigerian consumers. “This tariff hike will push Nigerians further into poverty. The government must address the underlying issues in the power sector before imposing additional burdens on consumers,” Okorie stated.
While the government has yet to officially confirm the planned increase, Bolaji Tunji, Special Adviser on Media Relations to the Minister of Power, acknowledged that cost-reflective tariffs are inevitable in the future but stressed that the government is currently focused on strengthening the grid and transitioning more consumers to Band A.
PowerUp Nigeria founder Tayo Adegbenle, however, supports the tariff hike, arguing that it is necessary for the long-term sustainability of the power sector. Adegbenle noted that subsidies have long hindered the growth of the sector and that attracting private investment requires a shift toward market-driven pricing.
Nigeria’s electricity generation, which currently stands at 4,500 megawatts, remains insufficient to meet the needs of its over 200 million citizens. Efforts to increase capacity to 6,000MW in 2024 were hindered by grid collapses and vandalism. Consequently, over 250 companies and institutions have resorted to self-generation, further highlighting the challenges facing Nigeria’s power sector.
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