Abuja Nigeria
Nigeria’s Minister of Power, Adebayo Adelabu, has issued a stark warning to citizens: the era of electricity subsidies is coming to an end.
Addressing stakeholders at a briefing over the weekend, Adelabu said Nigeria’s economy “can no longer sustain the current subsidy regime,” citing a ballooning debt to power generation companies and unsustainable federal spending on electricity support.
“The government spent over ₦762 billion on electricity subsidies between January and April 2025 alone. This is not sustainable,” Adelabu said.
Currently, electricity costs the government an average of ₦116.18 per kilowatt-hour (kWh), while consumers pay ₦88.20/kWh—leaving a gap of nearly ₦28 per unit.
Massive Debt, Stressed Sector
The Federal Government reportedly owes over ₦4 trillion to power generation companies (GenCos). Adelabu says part of the plan includes clearing these debts within six months through a mix of cash payments and promissory notes.
Shift to Targeted Subsidies
While the general subsidy will be removed, Adelabu stated that the government is considering a “targeted subsidy approach” to protect Nigeria’s most vulnerable citizens. However, no clear criteria have yet been provided for this rollout.
Only Band A Currently Paying Full Tariff
As it stands, only about 15% of electricity consumers those classified as Band A pay full, cost-reflective tariffs. The new policy aims to gradually transition more customers to that model.
What It Means for Nigerians
The announcement signals a rise in electricity bills in the coming months. With inflation and fuel prices already straining household incomes, many Nigerians are concerned about the affordability of basic utilities.
But Adelabu insists that a market-reflective pricing model is critical to attracting investment, improving power generation, and stabilizing the sector.
“Without realistic tariffs, we cannot fund expansion or improve service delivery. We either fix the system now or continue to suffer nationwide blackouts,” he warned.
