FG Says No Plan To Increase Electricity Tariffs

From Victor Osula, Abuja

The Federal Government has dismissed reports suggesting an imminent hike in electricity tariffs, describing them as misinterpretations of official statements.

A Bloomberg report had earlier quoted the Special Adviser to President Bola Tinubu on Energy, Olu Arowolo Verheijen, as indicating that an increase in electricity tariffs was on the horizon.

The report claimed the move was part of efforts to introduce a cost-reflective pricing model aimed at attracting private sector investment into the power sector.

“One of the key challenges we’re looking to resolve over the next few months is transitioning to a cost-efficient but cost-reflective tariff, so the sector generates revenue required to attract private capital while also protecting the poor and vulnerable,” Verheijen was reported to have said at the Africa Heads of State Energy Summit in Dar es Salaam, Tanzania.

However, in a statement issued on Monday, Verheijen clarified that the report misrepresented her comments.

She explained that while the government remains committed to fairer pricing in the long term, there are no immediate plans to increase tariffs.

“It has become necessary to clarify media reports suggesting an imminent 65 percent increase in electricity tariffs. This is a misrepresentation of what I actually said in a recent press interview,” Verheijen stated.

She noted that current electricity tariffs cover about 65% of the actual cost of supply following the upward adjustment of Band A tariffs in 2024, with the Federal Government continuing to subsidize the difference to cushion the impact on consumers.

“The immediate focus is on taking decisive action to deliver more electricity to Nigerians, ensure fewer outages, and guarantee the protection of the poorest and most vulnerable Nigerians,” she added.

Verheijen outlined several reforms the government is implementing to improve the country’s power sector. These include the Presidential Metering Initiative (PMI), targeted subsidies, debt resolution strategies, and the promotion of alternative power generation sources.

She revealed that under the PMI, the government plans to roll out seven million prepaid meters nationwide starting this year. This initiative aims to eliminate estimated billing, enhance transparency, and boost consumer confidence in electricity billing.

“Metering will attract the investments needed to strengthen Nigeria’s power infrastructure,” Verheijen said, noting that improved metering would also enhance revenue collection across the sector.

Additionally, the government is shifting from broad-based electricity subsidies to a more targeted approach.

Verheijen disclosed that the Federal Government currently spends over ₦200 billion monthly on electricity subsidies, much of which disproportionately benefits the wealthiest 25% of Nigerians.

“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 for millions of hardworking Nigerian families,” she explained.

Verheijen also identified the settlement of long-standing debts owed to power generation companies as a critical part of the government’s reform strategy. She emphasized that these debts have stifled investments in new infrastructure and hindered efforts to improve power supply nationwide.

“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,” she added.

The Federal Government’s latest clarification seeks to allay public concerns about potential tariff hikes while reaffirming its commitment to power sector reforms designed to enhance service delivery, promote sustainability, and protect vulnerable populations.