A storm of public outrage is brewing across Nigeria following fresh hints by the Federal Government of a planned electricity tariff hike—an economic move aimed at phasing out subsidies and reducing a ballooning power sector debt now estimated at over ₦5 trillion.
The announcement, made by Minister of Power, Adebayo Adelabu, during the Mission 300 Stakeholders’ Engagement in Abuja, has reignited long-standing frustrations among electricity consumers who say they continue to pay high bills despite poor service delivery, erratic supply, and failed infrastructure investments.
Adelabu revealed that the government is working to implement a cost-reflective tariff regime as part of broader reforms to achieve market liquidity, sustainability, and long-term viability in the power sector. He disclosed that as of December 2024, unpaid subsidies owed to electricity generation companies (GenCos) had reached ₦4 trillion, with ₦1.1 trillion more added in the first half of 2025.
“The Federal Government is already working out modalities to defray this obligation. To prevent further debts, we are transitioning to a fully cost-reflective tariff structure while implementing targeted subsidies for vulnerable Nigerians,” Adelabu said.
According to data presented, the cost-reflective tariff for Band A – Non-MD customers is ₦231.79, yet the allowed tariff remains at ₦209.50. For Band B and C customers—typically lower-income households—the gap is even wider, with allowed tariffs still pegged around ₦67 and ₦56 respectively, against cost-reflective benchmarks that exceed ₦200 in some cases.
This stark disparity, critics argue, not only highlights systemic inefficiencies but also raises questions about whether consumers will get value for money under the proposed hike.
Nigerians have responded with strong criticism. Kunle Olubiyo, President of the Nigeria Consumer Protection Network, accused the government and distribution companies (DisCos) of exploitation.
“You can’t triple revenue inflow with tariff segmentation and still fail to improve supply,” he said. “From 2015 till date, we’ve only added 400 megawatts to the grid. Where’s the progress?”
Olubiyo further warned that increased tariffs without corresponding improvements in generation, transmission, and distribution capacity would amount to “fleecing consumers.”
Abubakar Aliyu, a Band C consumer in Gwagwalada, Abuja, echoed these sentiments. He said his community rarely enjoys six hours of power daily.
“Even with the current tariff, service is terrible. On some days, there’s total blackout. How do they expect us to pay more when we get less?” he asked.
Bode Fadipe, CEO of Sage Consulting & Communications, cautioned against focusing solely on cost-reflectivity, pointing out the sector’s deeper structural challenges.
“Yes, the government owes GenCos, and yes, liquidity is a problem. But where’s the investment in infrastructure? Where’s the political will to enforce service-level agreements?”
Fadipe stressed that cost reflectivity alone cannot fix the power sector without parallel investments in grid stability, renewable energy, and regulatory enforcement.
In response to the criticism, Adelabu outlined a comprehensive strategy that includes:
Expanding and stabilizing the national grid
Upgrading transmission and distribution infrastructure
Enhancing rural electrification and clean energy deployment
Addressing liquidity concerns and incentivizing private investment
He added that targeted subsidies would be retained for economically vulnerable Nigerians to cushion the effects of the tariff adjustments.
Minister of Finance, Wale Edun, speaking virtually from Brazil, defended the reform plan, stating it had already led to a 40% increase in power distribution during Q1 2025.
While the FG’s goal of a financially sustainable power sector is clear, its path—anchored on higher electricity tariffs—has struck a nerve with ordinary Nigerians still battling unreliable supply and economic hardship. As discussions continue, stakeholders are urging a balanced, inclusive approach that prioritizes accountability, service delivery, and people-centered policy reforms.