The federal government has clarified recent media reports and outlined the Federal Government’s (FG) renewed focus on reforming Nigeria’s power sector.
Contrary to reports of an imminent 65 percent increase in electricity tariffs, the federal government stated that such claims were a misrepresentation.
According to a press release signed by the Special Adviser to the President on Energy, Olu Arowolo Verheijen, following the Band A tariff increase in 2024, current tariffs now cover roughly 65 percent of the actual cost of electricity supply.
She maintained that the federal government continues to subsidize the balance, underscoring its commitment to fair pricing while ensuring that the poorest and most vulnerable Nigerians are protected.
A key element of the power sector reforms, she said is the Presidential Metering Initiative (PMI), which aims to revolutionize billing practices.
Starting in 2025, the FG will roll out 7 million prepaid smart meters nationwide.
This initiative is expected to eliminate estimated billing, thereby instilling consumer confidence and enhancing transparency in electricity charges.
Improved metering is also anticipated to boost revenue collection and attract much-needed investments to upgrade Nigeria’s power infrastructure.
In addition to metering reforms, the statement said that the government is set to revamp electricity subsidies.
“Today, the Federal government spends over ₦200 billion per month on electricity subsidies, but much of this support benefits the wealthiest 25 percent of Nigerians rather than those who truly need assistance.
“To address this, the Federal government is working towards a targeted subsidy system to ensure that low-income households receive the most support. This approach will make electricity more affordable and accessible for millions of hardworking families.”
She added that the FG is working towards a more targeted subsidy system to ensure that low-income households receive the support they need, making electricity more affordable for millions of hardworking families.
“For years, these debts have prevented investments in new infrastructure and hampered efforts to improve electricity supply.
“By clearing these outstanding obligations, the government is ensuring that power companies can reinvest in better service delivery, stronger infrastructure, and a more stable electricity supply for all Nigerians.”
By addressing these debts, she noted that the government aims to enable power companies to reinvest in infrastructure and improve service delivery.
The reforms extend to reducing costs for alternative power generation as well.
Through a range of fiscal incentives, including VAT and Customs Duty Waivers, the Federal Government is working to lower the cost of alternative power sources such as Compressed Natural Gas and Liquified Petroleum Gas, she stated.
“The government fully understands the economic realities facing citizens and is committed to ensuring that reforms in the power sector lead to tangible improvements in people’s daily lives.
“Every policy is designed with the Nigerian people in mind — eliminating unfair estimated billing, ensuring that subsidies benefit the right people, and creating the conditions for stable, affordable electricity.”
