The Federal Government (FG) has dismissed widespread reports suggesting an imminent 65% increase in electricity tariffs, clarifying that the situation has been misunderstood. Olu Verheijen, Special Adviser to President Bola Tinubu on Energy, addressed the issue, stating that the recent adjustments in Band A tariffs only ensure that current electricity charges cover around 65% of the actual cost of power supply. The government still shoulders the remaining cost through subsidies.
In a statement posted on her X (formerly Twitter) account on Monday, Verheijen criticized the media for misrepresenting her earlier comments during a press interview.
“There’s no plan to suddenly hike electricity tariffs by 65%. What I mentioned was that, after the Band A tariff adjustments in 2024, the current rates now cover approximately 65% of the true cost of providing electricity. The Federal Government continues to subsidize the rest,” she explained.
Focus on Reliable Power, Not Price Hikes
While acknowledging the long-term goal of achieving fairer electricity pricing, Verheijen emphasized that the government’s immediate priority is to improve electricity supply, reduce outages, and protect low-income households from excessive costs.
“Our focus right now is to ensure Nigerians get more reliable power, experience fewer blackouts, and that the poorest citizens are shielded from financial strain,” she said.
As part of its broader energy reforms, the FG plans to transition from broad-based subsidies to a targeted subsidy system aimed at supporting the most vulnerable Nigerians.
Why the Current Subsidy Model Isn’t Working
Verheijen highlighted a critical flaw in the current subsidy structure:
“The Federal Government spends over N200 billion monthly on electricity subsidies. However, much of this support inadvertently benefits the wealthiest 25% of Nigerians instead of those who truly need help.”
To correct this imbalance, the government is working towards a targeted subsidy framework that will direct financial support where it’s most needed. The goal is to make electricity more affordable and accessible to millions of Nigerian families struggling with high energy costs.
Addressing the Metering Gap: The Presidential Metering Initiative
Concerns about unmetered customers being overcharged have also been addressed. Verheijen reaffirmed the FG’s commitment to tackling “estimated billing” through the launch of the Presidential Metering Initiative.
“We’re accelerating the rollout of 7 million prepaid meters nationwide, starting this year. This initiative will eliminate the unfair practice of estimated billing, promote transparency, and give consumers confidence that they’re paying for what they actually use,” she said.
The metering program is also expected to boost revenue collection within the power sector, making the industry more attractive to investors and paving the way for improvements in Nigeria’s aging electricity infrastructure.
Clearing Debts to Power Companies: A Step Toward Stability
Another key issue the FG is addressing is the mounting debt owed to power generation companies. According to Verheijen, these unpaid obligations have long been a barrier to private sector investments in Nigeria’s power industry.
“For years, outstanding debts have hindered infrastructure development and limited efforts to improve power supply. By settling these debts, the government aims to unlock fresh investments that will strengthen Nigeria’s electricity grid and ensure a more stable, reliable power supply for everyone,” she stated.
Bottom Line
Despite public fears, there’s no immediate plan to impose a 65% hike in electricity tariffs. Instead, the FG is focusing on restructuring subsidies, expanding metering access, and resolving debt issues within the power sector—all aimed at creating a more sustainable, efficient, and fair electricity system for Nigerians.
