Federal Government says it will begin the gradual phase-out of electricity subsidies from 2027 as part of ongoing reforms aimed at improving the sustainability of Nigeria’s power sector.
The Minister of Power, Joseph Tegbe, disclosed this during a media parley with journalists in Abuja on Friday.
Tegbe said the subsidy removal would be implemented gradually to minimise its impact on electricity consumers, assuring Nigerians that they would not be deprived of the benefits currently available under the existing arrangement.
According to him, there are no immediate plans by the Federal Government to increase electricity tariffs.
“The subsidy will be gradually removed, but Nigerians will not be deprived of any benefits,” the minister said.
He explained that the government’s approach was designed to ensure a smooth transition while strengthening the financial viability of the electricity industry.
Nigeria’s power sector has for years been burdened by a significant funding gap arising from the difference between the cost of generating and transmitting electricity and the revenue collected by electricity distribution companies from consumers.
The shortfall has largely been covered by the Federal Government through subsidy payments to operators in the sector.
Industry stakeholders have repeatedly argued that the subsidy regime has placed enormous pressure on public finances while limiting investments required to improve electricity generation, transmission and distribution infrastructure.
The Federal Government has, however, maintained that reforms in the power sector are necessary to attract private investment, improve service delivery and ensure the long-term sustainability of electricity supply across the country.
The minister did not provide details on the implementation framework for the planned subsidy phase-out but reiterated the government’s commitment to protecting consumers while pursuing reforms in the sector.
