Nigerians may soon face a significant increase in electricity tariffs as the Federal Government moves towards eliminating power subsidies, a decision that has sparked widespread opposition among consumers and industry stakeholders.
Special Adviser to the President on Energy, Olu Verheijen, recently disclosed that electricity tariffs may rise by approximately 66%, increasing from N116.18 to N193.63 per kilowatt-hour. Speaking at the Mission 300 Energy Summit in Dar es Salaam, Tanzania, Verheijen emphasized that the hike is necessary to reflect the actual cost of power supply and to attract private investment into the sector.
“Nigeria’s power prices need to rise by about two-thirds for many customers to reflect the cost of supplying it,” Verheijen stated. She added that the increase would be implemented within the coming months to ensure the sector generates sufficient revenue while providing subsidies for vulnerable consumers.
The Nigerian Electricity Regulatory Commission (NERC) has also hinted at the inevitability of a cost-reflective tariff. A senior NERC official, who spoke anonymously, revealed that subsidies are becoming unsustainable, leading to financial distress for electricity distribution companies (DisCos). “The government can no longer shoulder the responsibility of paying subsidies. It is no longer sustainable. So, all customers should get set for new tariffs,” the official warned.
Consumer Backlash and Industry Response
Electricity consumers have voiced strong opposition to the planned hike, citing poor service delivery, inadequate power supply, and metering deficiencies. Adeola Samuel-Ilori, Coordinator of the Electricity Consumers Protection Forum, criticized the government for contemplating a tariff increase without addressing longstanding metering challenges.
“There is a meter acquisition fund deducted from customers’ tariffs since 2019, yet millions remain unmetered. The law mandates that DisCos provide meters at no cost to consumers, but this is not being enforced,” Samuel-Ilori stated. He warned that consumers on estimated billing might end up paying more for power they do not receive.
Similarly, the Executive Director of the Consumer Protection Advocacy Centre, Princewill Okorie, decried the tariff hike as an economic burden on Nigerians already struggling with inflation and high living costs. “This increase is uncalled for, especially when many consumers are not metered. The government must prioritize service delivery before thinking of raising tariffs,” he said.
Power Sector Challenges and Future Outlook
Nigeria’s electricity sector has been plagued by challenges, including inadequate power generation, grid collapses, and revenue shortfalls. Of the country’s 14-gigawatt installed capacity, only 4-5GW is effectively distributed to consumers. The DisCos have prioritized customers on Band A, who receive at least 20 hours of power daily, while those in Bands B to E experience erratic supply.
In defense of the proposed increase, Tayo Adegbenle, founder of PowerUp Nigeria, argued that removing subsidies would enhance service quality and attract investment. “Our subsidy regime is unsustainable. The Federal Government’s move towards cost-reflective tariffs aligns with global best practices,” he said.
Despite mounting concerns, the Special Adviser to the Minister of Power on Media, Bolaji Tunji, maintained that no immediate tariff increase is planned. “Cost-reflectiveness is desirable, but our focus remains on strengthening the grid and migrating more consumers to Band A,” he stated.
With over 200 million people and a struggling power sector, Nigeria faces a tough decision—balance consumer affordability with financial sustainability. However, until metering gaps are addressed and power supply improves, many Nigerians remain skeptical of any increase in electricity tariffs.
