During a briefing in Abuja on Friday, Minister of Power, Adebayo Adelabu, advised Nigerians to brace for an imminent increase in electricity prices. He explained that the recent surge in electricity tariffs marks the beginning of a phased approach towards phasing out subsidies in the sector.
Adelabu emphasized the government’s intention to eliminate all subsidies in the electricity industry to stimulate greater investment in the power sector.
He stated, “This tariff adjustment aligns with our strategy of maintaining subsidized pricing in the short term, with a gradual transition towards a fully cost-reflective tariff over a period, let’s say three years.” Adelabu highlighted the government’s commitment to alleviating the burden on citizens, avoiding a sudden removal of subsidies akin to what occurred in the oil and gas sector.
“We are mindful of the hardships faced by our people, which is why we are adopting a gradual approach towards transitioning from a subsidized regime to a fully cost-reflective one,” he added. Adelabu clarified that the tariff adjustment is akin to a pilot program, aimed at testing the feasibility of gradually migrating customers to a full cost-reflective tariff.
Adelabu underscored the financial strain caused by subsidies, revealing that the government would have incurred a staggering N2.9 trillion in subsidy payments for 2024 alone, equivalent to over 10 percent of the national budget. He emphasized the need to redirect these funds towards pressing national priorities.
