Despite denials of an imminent 65 percent increase in electricity tariffs, the federal government’s latest policy direction signals that higher tariffs are on the horizon.
The government increased tariffs for Band A customers last year from about ₦66 to over ₦220 per kilowatt-hour, a near threefold increase. The sharp rise has contributed to inflation at a time when fuel and cooking gas prices have also surged, further straining household budgets.
In a statement clarifying media reports, Special Adviser to the President on Energy, Olu Arowolo Verheijen, said increased rate for Band A only covers 65% of the actual cost of supply, with the government subsidizing the remaining gap.
Verheijen said currently, the government spends over ₦200 billion per month on electricity subsidies, but a significant portion benefits high-income households instead of the most vulnerable Nigerians. To address this imbalance, the government plans to restructure subsidies, ensuring low-income households receive greater support.
She said a major pillar of the government’s power sector reform is the Presidential Metering Initiative (PMI), which will roll out 7 million prepaid meters nationwide starting in 2025.
The government is also prioritizing the settlement of debts owed to power generation companies, a critical step in attracting new investments into the sector. Years of accumulated debts have prevented necessary infrastructure upgrades, leading to power outages and unreliable supply. By clearing these obligations, the government hopes to enable power firms to reinvest in service improvements.
The Special Adviser’s previous interview with Bloomberg—which was widely reported in local media—sparked speculation about looming tariff hikes. While she attempted to walk back those remarks, her clarification effectively confirms the inevitability of higher electricity costs while simultaneously denying an immediate 65 percent increase.
Discover more from Pluboard
Subscribe to get the latest posts sent to your email.