The Federal Government has announced plans to begin phasing out electricity subsidy payments from 2027 as part of ongoing efforts to address the financial challenges facing Nigeria’s power sector.
The Minister of Power, Joseph Tegbe, disclosed this on Friday during a media interactive session, saying the government was working towards making the electricity industry financially sustainable.
Tegbe said the planned subsidy phase-out would be implemented gradually and would not deprive Nigerians of the benefits currently provided under the subsidy regime.
According to the minister, the reform is aimed at reducing the government’s growing financial obligations in the electricity sector while creating a more commercially viable power industry.
“The phase-out of electricity subsidies will begin from 2027. However, there are no immediate plans to increase electricity tariffs. Our goal is to build a commercially viable power sector while protecting vulnerable consumers,” he said.
Tegbe stressed that the government was not planning an immediate increase in electricity tariffs, assuring consumers that the subsidy reform would be accompanied by measures to protect vulnerable households.
He said the Power Consumer Assistance Fund would be central to cushioning the impact of the reforms on consumers who may be most affected by the eventual withdrawal of subsidies.
“The Power Consumer Assistance Fund will play a critical role in cushioning the impact on vulnerable consumers as we implement these reforms,” the minister said.
He added that details of the implementation timeline and measures to protect consumers would be announced as the reform process progresses.
The minister noted that electricity subsidies had become a significant fiscal burden on the government, making reforms necessary to ensure the long-term sustainability of the power sector.
