The federal government is considering raising electricity tariffs for additional bands as part of its plan to phase out electricity subsidies nationwide.
Minister of Power, Adebayo Adelabu, revealed this during a briefing in Abuja on Friday.
This announcement follows closely after the Nigerian Electricity Regulatory Commission (NERC) raised tariffs for Band A customers from N66 to N225 per kilowatt-hour (KW/h) just two days ago.
Adelabu disclosed that similar tariff adjustments will soon extend to customers in other bands as the government aims to eliminate electricity subsidies gradually.
He clarified that the tariff review aligns with the government’s strategy of maintaining subsidized prices in the short term while transitioning to fully cost-reflective tariffs over approximately three years.
The Minister stressed that the government is mindful of the challenges faced by Nigerians and is committed to a gradual approach to avoid further hardship.
“We are not ready to aggravate the sufferings any longer which is why we said it must be a journey rather than a destination and the journey starts from now on, that we should do a gradual migration from the subsidy regime to a full cost reflective regime and we must start with some customers,” Adelabu stated.
He described the tariff adjustments as a pilot initiative, focusing on customers with sufficient infrastructure to ensure stable power supply, thereby enjoying enhanced service and contributing to the cost.
Adelabu highlighted the financial burden of maintaining electricity subsidies, estimating that without removal, the government would incur a subsidy cost of N2.9 trillion in 2024 alone, which represents over 10 percent of the national budget.
“It would be insensitive to burden the government with such subsidies when there are other pressing needs demanding funding,” he concluded.
