FG Plans To End Electricity Subsidies From 2027, Rules Out Immediate Tariff Hike

The Federal Government says it plans to begin ending electricity subsidy payments from 2027, but insists there is no immediate plan to raise tariffs.

Power Minister Joseph Tegbe said the government wants to stop the subsidy burden from building up again while protecting consumers and improving supply. He spoke during a media session on power sector reforms.

Vanguard and Daily Post reported that Tegbe tied the planned subsidy phase-out to efforts to clear legacy debts and build a more sustainable electricity market. Daily Post reported that the Power Consumer Assistance Fund would be used to cushion vulnerable consumers as reforms move forward.

Punch separately reported Tegbe’s assurance that the administration had no policy to increase electricity tariffs in the immediate term. He said the priority was better service, wider metering and ensuring customers pay for power they actually consume.

The subsidy debate comes as power-sector debts remain a major pressure point. Vanguard cited government figures putting the subsidy burden at about ₦3 trillion as of February 2024, while generation companies were said to be owed roughly ₦6.5 trillion.

The minister said more details on the timeline and consumer protection measures would be released as the reforms progress.

Sources: Vanguard, Daily Post, Punch