As the nation grapples with economic adjustments and reforms, Nigeria’s Minister of Power, Adebayo Adelabu, has issued a sobering notice to citizens: higher electricity tariffs are on the horizon. In a candid statement during a crucial meeting with the leadership of electricity Generation Companies (GenCos), the Minister underscored the federal government’s resolve to phase out blanket subsidies in the power sector—a move he described as both inevitable and necessary for the sector's survival.
Speaking to energy stakeholders in Abuja, Adelabu lamented the ballooning debts owed to GenCos, which now exceed a staggering ₦4 trillion. He warned that unless urgent reforms are carried out—including a transition to cost-reflective tariffs—the entire power sector could be at risk of collapse.
“The era of blanket subsidies in the power sector is no longer sustainable,” Adelabu declared. “We are owing GenCos over four trillion naira. No investor can survive under such conditions. Nigerians must prepare for adjustments in electricity tariffs to reflect the true cost of production and supply.”
At the heart of the proposed reforms is a more equitable and targeted subsidy framework. While vulnerable and low-income citizens will continue to benefit from government intervention, the majority of electricity consumers—particularly those in urban centers and commercial hubs—will begin to see more realistic, market-reflective electricity bills.
Currently, only about 15% of Nigerians—those classified under Band A—are charged the full tariff of approximately ₦225 per kilowatt-hour (kWh). The remaining majority still enjoy heavily subsidized rates, some paying as low as ₦34 to ₦68 per kWh. Adelabu made it clear that this disparity is financially unsustainable and is contributing to the sector’s long-standing inefficiencies.
“Our aim is not to punish Nigerians, but to ensure sustainability in power generation and distribution,” he explained. “Without cost-reflective tariffs, GenCos and DisCos will continue to operate at a loss, which ultimately leads to poor supply, erratic service, and a collapse of trust in the system.”
In response to concerns over how the government intends to settle the existing debt, Adelabu announced that a significant portion of the ₦4 trillion owed will be cleared through immediate cash payments and promissory notes over a six-month period. This intervention, he noted, is aimed at restoring liquidity in the sector and boosting investor confidence.
The Minister’s statement comes at a time when electricity consumers across the country are already dealing with rising inflation, a volatile naira, and increased costs of living. While many Nigerians have expressed frustration over the looming hike, energy experts argue that the implementation of a transparent, fair, and efficient tariff system is long overdue and could ultimately lead to improved services.
Meanwhile, Adelabu assured that reforms would be accompanied by improved regulatory oversight, stronger enforcement of service agreements by DisCos, and investments in renewable energy to stabilize supply and reduce dependency on the national grid.
With these developments, Nigeria appears to be at a pivotal point in its energy transition. The months ahead will test the government’s ability to balance economic realities with social equity—ensuring that while the power sector remains afloat, the average Nigerian is not left in the dark.