WATCH THE VIDEO HERE The Minister of Power, Adebayo Adelabu, has announced that the nation’s economy can no longer bear the burden of electricity subsidies. Speaking at a high-stakes meeting with the Chairmen of Nigeria’s Generating Companies (Gencos) in Abuja, Adelabu urged Nigerians to brace for the introduction of cost-reflective tariffs, a change he described as inevitable. While the phasing out of broad subsidies marks a significant policy pivot, Adelabu reassured citizens that the government remains committed to protecting the most vulnerable. The Federal Government will continue to provide targeted subsidies for economically disadvantaged Nigerians “The Federal Government will continue to provide targeted subsidies for economically disadvantaged Nigerians,” he affirmed, signaling a more focused approach to support those in need. According to the Nigerian Electricity Regulatory Commission (NERC), the real cost of electricity stands at N116.18 per kilowatt-hour (kWh), yet consumers currently pay an average of N88.2 per kWh. This discrepancy, amounting to a subsidy of N27.97 per kWh as of February, has been a lifeline for millions but a growing liability for the government. All customers in the Nigerian Electricity Supply Industry (NESI), except the 15 percent classified as Band A, currently benefit from this subsidy. Citizens must pay the appropriate price for the energy consumed The minister’s spokesperson, Mr. Bolaji Tunji, echoed Adelabu’s call for accountability in energy consumption. “Citizens must pay the appropriate price for the energy consumed,” Tunji reported, relaying the minister’s message to the Gencos. The shift to cost-reflective tariffs aims to align consumer payments with the actual cost of power generation, a move Adelabu believes will stabilize the sector. Central to the minister’s address was the urgent need to resolve the N4 trillion debt choking power generation companies. Adelabu outlined a dual-pronged strategy to address this crisis, blending immediate cash payments with longer-term financial instruments. There is a need to pay a substantial amount of the debt in cash “There is a need to pay a substantial amount of the debt in cash,” he explained. “At the minimum, let us pay a substantial amount, then ask for a debt instrument in promissory notes to pay the rest.” This approach, he argued, would provide immediate relief to Gencos while ensuring the government’s commitment to clearing the backlog. “We recognise the urgency of this matter,” Adelabu stressed. “The government is committed to resolving this debt to stabilise the sector and prevent further crisis.” The announcement has sparked mixed reactions across the country. For many Nigerians already grappling with rising living costs, the prospect of higher electricity tariffs looms as a fresh burden.
“We have to understand that our economy cannot sustain subsidies indefinitely,” Adelabu stated, underscoring the financial strain that has long plagued the power sector. The minister’s remarks come amid mounting pressure to address a staggering N4 trillion debt owed to Gencos by the Federal Government, a legacy of unpaid subsidy commitments.
Electricity Subsidy Ending Soon- FG Tells Nigerians to Prepare for Higher Tariffs
