The Federal Government has announced plans to begin a gradual phase-out of electricity subsidies from 2027 as part of efforts to restore the financial health of Nigeria’s power sector and reduce its mounting debt burden.
Minister of Power, Joseph Tegbe, disclosed this during a media briefing on Friday, assuring Nigerians that the planned reforms would not result in an immediate increase in electricity tariffs.
Tegbe said the government’s objective is to establish a commercially sustainable electricity market while protecting vulnerable consumers from the effects of the subsidy removal.
He said, “The phase-out of electricity subsidies will begin from 2027. However, there are no immediate plans to increase electricity tariffs. Our goal is to build a commercially viable power sector while protecting vulnerable consumers.”
The minister explained that the government is committed to tackling the sector’s financial challenges through improved metering, reduced technical and commercial losses, stronger payment discipline, and reforms aimed at attracting private investment.
He added that the subsidy removal would be implemented in phases to minimise its impact on low-income households.
“The Power Consumer Assistance Fund will play a critical role in cushioning the impact on vulnerable consumers as we implement these reforms,” Tegbe stated.
According to him, further details on the implementation timeline and consumer protection measures will be announced as the reform programme progresses.
Nigeria’s electricity subsidy has continued to place significant pressure on public finances.
The Nigerian Electricity Regulatory Commission (NERC) disclosed that subsidy obligations reached about N358 billion in the first quarter of 2026 despite recent reductions.
The power sector is also burdened by trillions of naira in outstanding debts owed to electricity generation companies, prompting the Federal Government to pursue debt-reduction measures, including the issuance of bonds.
Titilope Adako is a talented and intrepid journalist, dedicated to shedding light on the untold stories of Osun State and Nigeria. Through incisive reporting, she tackles a broad spectrum of topics, from politics and social justice to culture and entertainment, with a commitment to accuracy, empathy, and inspiring positive change.
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