Nigerians Must Prepare For Higher Electricity Tariffs – Adelabu
The Minister of Power, Adebayo Adelabu, has urged Nigerians to brace for cost-reflective electricity tariffs, stating that the nation’s economy can no longer sustain electricity subsidies.
Speaking at a meeting with chairmen of power generating companies (GenCos) in Abuja, Adelabu said the Federal Government remains committed to targeted subsidies for the economically disadvantaged, although he did not specify who qualifies under that category.
The minister revealed that the government currently owes GenCos over N4 trillion in unpaid subsidy, a situation that continues to cripple power generation in the country.
According to a February report by the Nigerian Electricity Regulatory Commission (NERC), the average actual electricity tariff stands at N116.18/kWh, while consumers only pay N88.2/kWh. This creates a subsidy gap of N27.97/kWh. Only about 15 per cent of customers — those in Band A — pay cost-reflective rates.
Adelabu’s spokesman, Bolaji Tunji, quoted him as saying: “Citizens must pay the appropriate price for the energy consumed. The Federal Government will continue to provide targeted subsidies for economically disadvantaged Nigerians.”
Adelabu disclosed that the Federal Government is working on a plan to settle a significant portion of the N4 trillion debt through cash payments and financial instruments such as promissory notes.
“This proposal will be tabled during a meeting being arranged between President Bola Ahmed Tinubu and the leadership of GenCos,” he added.
Chairman of Mainstream Energy Solutions, Col. Sani Bello (retd.), who led the GenCos to the meeting, raised concerns over the sector’s financial challenges, warning that the N4 trillion debt poses a serious threat to operations.
“Without urgent intervention, the entire power ecosystem could collapse,” Bello warned.
Kola Adesina, chairman of Egbin Power and First Independent Power Limited, echoed the same concern, describing the situation as a national emergency.
“Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail,” he said.
Dr. Joy Ogaji, CEO of the Association of Power Generating Companies, listed the key challenges facing GenCos as payment defaults, unstable gas supply, and foreign exchange volatility.
She noted that the naira’s decline from N157/$1 in 2013 to N1,600/$1 has severely affected maintenance budgets and loan repayments.
“GenCos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” Ogaji said.
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.
