The Federal Government has disclosed that it spends N200 billion monthly on electricity subsidies, with the wealthiest 25% of Nigerians benefiting the most rather than those in genuine need.
Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, made this known in a statement on Monday while addressing reports suggesting an imminent 65% increase in electricity tariffs.
While Verheijen did not deny the possibility of a tariff hike, she clarified that she had not stated tariffs would rise by 65%.
“It has become necessary to clarify media reports suggesting an imminent 65% increase in electricity tariffs. This is a misrepresentation of my statement in a recent press interview,” Verheijen said.
She explained that following the increase in Band A tariffs in 2024, current tariffs now cover about 65% of the actual cost of electricity supply, with the Federal Government subsidizing the remaining amount.
According to her, while the government is committed to ensuring fair pricing over time, the immediate focus is on improving electricity supply, reducing outages, and protecting the most vulnerable Nigerians.
To ensure fairer distribution of subsidies, the government is working towards a targeted subsidy system aimed at supporting low-income households.
“Today, the Federal Government spends over N200 billion monthly on electricity subsidies, yet much of this support benefits the wealthiest 25% of Nigerians rather than those who truly need assistance,” she stated.
She emphasized that the Presidential Metering Initiative would help eliminate estimated billing and improve transparency.
“This initiative will roll out seven million prepaid meters nationwide, starting this year. It will put an end to estimated billing, boost consumer confidence, and enhance revenue collection in the power sector,” she explained.
Verheijen also highlighted efforts to clear debts owed to power generation companies, which have hindered investments in infrastructure and service improvements.
“For years, these debts have stalled investment in new infrastructure and affected electricity supply. By clearing these obligations, the government is ensuring that power companies can reinvest in better service delivery and a more stable power supply,” she said.
Additionally, the government is offering fiscal incentives, including Value Added Tax and Customs Duty Waivers, to reduce the cost of alternative energy sources such as Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG).
Public concerns and opposition
Despite these reforms, the Human Rights Writers Association of Nigeria (HURIWA) has strongly opposed any increase in electricity tariffs.
In a statement on Monday, HURIWA’s National Coordinator, Emmanuel Onwubiko, warned that the proposed hike could trigger widespread public discontent, given the current economic challenges.
He described the move as “toxic, unconstitutional, and a direct assault on the economic survival of Nigerian citizens.”
As discussions continue, the government maintains that its reforms aim to ensure fairer subsidy distribution, stable electricity supply, and long-term affordability for Nigerians.
