FG Denies Plans to Increase Electricity Tariffs by 65%

Bloomberg reported on Monday that electricity tariffs to reflect the actual cost of production, some Nigerians might need to pay over 65 per cent of what they are currently paying for a kilowatt/hour of electricity.

“Nigeria’s power prices need to rise by about two-thirds for many customers to reflect the cost of supplying it,” Bloomberg quoted the Special Adviser to President Bola Tinubu on Energy, Ms Olu Verheijen, yesterday.

Ms Verheijen took to her official X handle to clarify that she was misquoted out of context by Bloomberg, noting that while there was an adjustment in Band A tariffs in 2024, the new rates only cover 65 per cent of the actual cost of electricity supply, with the government continuing to subsidize the difference.

“The immediate focus of the government is not tariff hikes but delivering more electricity to Nigerians, reducing outages, and protecting the poorest and most vulnerable citizens,” Ms Verheijen said.

The President’s adviser revealed that the government spends over N200 billion monthly on electricity subsidies, but much of this support benefits the wealthiest 25 per cent of Nigerians rather than those who truly need assistance.

“To correct this imbalance, the government is working on a targeted subsidy system that will prioritize low-income households and ensure electricity remains affordable for millions of hardworking Nigerians,” she stated.

She also disclosed that as part of ongoing reforms, the Presidential Metering Initiative will roll out 7 million prepaid meters starting this year, aiming to eliminate estimated billing and ensure transparency in electricity charges.

“With this initiative, Nigerians will only pay for the electricity they consume, reducing complaints about unfair billing while improving revenue collection and attracting investments to strengthen the power sector.

“The government is also addressing the mounting debts owed to power generation companies, which have hindered investment in new infrastructure and disrupted power supply.

“By settling these obligations, we are ensuring that power companies can reinvest in better service delivery, improve infrastructure, and provide a more stable electricity supply for all Nigerians,” Verheijen emphasized.

In addition, the government is implementing fiscal incentives, including VAT and Customs Duty Waivers, to reduce the cost of Compressed Natural Gas, CNG, and Liquefied Petroleum Gas, LPG, as alternative power sources.

Ms Verheijen assured Nigerians that the government remains committed to reforms that will enhance service delivery, expand electricity access, and improve affordability, rather than imposing sudden tariff increases.

“Our focus is on eliminating unfair estimated billing, ensuring subsidies benefit those who truly need them, and creating the conditions for stable, affordable electricity for all,” she said.