FG Confirms Upcoming Electricity Tariff Increase
The Federal Government has announced plans to increase electricity tariffs in the coming months, emphasizing the need for a cost-reflective pricing model to attract private investors into the power sector.
The Special Adviser to the President on Energy, Olu Verheijen, made this known at the Africa Heads of State Energy Summit in Dar es Salaam, Tanzania, where Nigeria unveiled a $32 billion plan to expand electricity access by 2030.
Why the Hike?
Verheijen explained that adjusting tariffs to reflect actual electricity costs is essential for ensuring long-term financial stability in the 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.
This will ensure the sector generates enough revenue to attract private capital while also protecting the poor and vulnerable.”
Will There Be Subsidies?
Yes. The government has assured that the impact of the tariff increase will be cushioned for low-income households through targeted subsidies.
The Road to Higher Tariffs
This move follows the government’s 2024 approval of a threefold increase in tariffs for customers under the Band A classification.
Meanwhile, Nigeria’s electricity distribution companies (DisCos)—burdened with mounting debts—have been advocating for cost-reflective tariffs to improve their financial standing and enhance service delivery.
What’s Next?
With the power sector struggling to meet demand, this tariff adjustment is expected to boost investment and improve supply.
However, Nigerians should prepare for higher electricity bills in the coming months.
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