From Juliana Taiwo-Obalonye, Abuja
The Federal Government on Monday addressed recent media reports regarding a potential 65% increase in electricity tariffs.
Special Adviser to the President on Energy, Olu Verheijen emphasised that the reports misrepresented her earlier statements.
She clarified that while tariffs currently cover approximately 65% of the actual cost of electricity supply, the government remains committed to ensuring fair pricing without imposing immediate hikes.
Verheijen was quoted as saying during the Mission 300 Energy Summit in Dar es Salaam, Tanzania, that the current power tariffs would rise by about two-thirds.
She was further quoted as saying Nigeria’s power prices need to rise by about two-thirds for many customers in order to reflect the cost of supplying it, adding that an increase should be expected within months.
She explained that the higher electricity tariffs, which need to be balanced by subsidies for less-affluent consumers, are required to fund the maintenance necessary to improve reliability and to attract private investors into power generation and transmission.
“Nigeria’s power prices need to rise by about two-thirds for many customers to reflect the cost of supplying it. Higher electricity tariffs, which need to be balanced by subsidies for less-affluent consumers, are required to fund the maintenance needed to improve reliability and to attract private investors into power generation and transmission.
“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,” Bloomberg quoted Verheijen as saying.
But in a statement she personally signed, she stressed that at the forefront of the government’s strategy is the Presidential Metering Initiative (PMI), which aims to roll out 7 million prepaid smart meters across the country starting in 2025.
The initiative is designed to eliminate the long-standing practice of estimated billing that has plagued consumers.
“This rollout will empower consumers by providing them with accurate billing based on their actual usage, thereby enhancing transparency in electricity charges,” Verheijen stated.
She added that the introduction of smart meters is expected not only to boost consumer confidence but also to improve revenue collection within the power sector, facilitating much-needed investments in Nigeria’s energy infrastructure.
In addition to metering reforms, the Federal Government is actively working on restructuring its electricity subsidy programme.
Verheijen further explained that currently, it spends over ₦200 billion monthly on subsidies; however, a significant portion of this financial support disproportionately benefits the wealthiest 25% of Nigerians.
To rectify this imbalance, Verheijen announced plans for a targeted subsidy system aimed at ensuring that low-income households receive adequate support.
“Our goal is to make electricity more affordable and accessible for millions of hardworking families who need it most,” she affirmed.
Another critical component of the government’s reform agenda, the presidential aide explained, involves settling longstanding debts owed to power generation companies.
The debts have historically hindered investments in new infrastructure and improvements in service delivery.
By prioritising the clearance of these obligations, she said the government aims to enable power companies to reinvest in their operations, leading to enhanced service reliability and reduced outages for consumers across Nigeria.
Recognising the economic challenges faced by citizens, Verheijen said the government is also implementing measures to reduce costs associated with alternative power generation sources.
Through various fiscal incentives—including VAT and customs duty waivers—the administration, she added, seeks to lower expenses for alternatives such as Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG).
The initiative is part of a broader effort to diversify energy sources and ensure stable electricity access for all Nigerians.
Verheijen underscored that these reforms are designed with the Nigerian people in mind.
“Every policy we implement aims at eliminating unfair estimated billing practices, ensuring subsidies reach those who truly need them, and creating conditions for stable and affordable electricity,” she said.
The presidential aide added that the government’s comprehensive approach seeks not only to address immediate challenges but also to lay a solid foundation for improved service delivery and expanded access to electricity for homes and businesses throughout Nigeria.
As these initiatives unfold, she said the federal government remains dedicated to fostering an energy sector that promotes prosperity and well-being for all Nigerians while navigating the complexities of pricing and service delivery in a rapidly changing economic landscape.