₦airaland Forum

The Federal Government has announced plans to introduce an annual electricity subsidy of $600m for all customers from 2025 as part of efforts to reform the power sector.

[i]The subsidy, expected to last until 2027, aims to bridge the gap between cost-reflective tariffs and regulated electricity rates, while the government works towards eliminating the metering deficit and enhancing the financial sustainability of power distribution companies.[/i]

According to Nigeria’s Energy Compact document obtained by Sunday PUNCH, the initiative is part of the National Energy Compact and aligns with Nigeria’s broader electrification and clean energy transition plans.

Nigeria, alongside Côte d’Ivoire, Zambia, and nine other African countries, presented its energy compact at a two-day summit in Tanzania, with a focused on innovative energy solutions.

However, the policy is a temporary measure designed to ensure affordability while the government progressively moves towards full cost-reflective tariffs.

The document noted that the subsidy might take different forms, including a flat monthly subsidy per electricity consumer or a subsidy on the first 50 kilowatt-hours consumed each month.

This approach intends to reduce the regressivity of previous subsidies, where a significant portion benefited wealthier households.

By 2027, the government plans to introduce a social tariff to protect low-income and vulnerable customers once the broader cost-reflective framework is fully implemented.

The document noted the Federal Government’s trajectory to full cost-reflectivity included a “$600m per year subsidy in 2025 to 2027 (while metering gap is being closed), and then fully CRT except for social tariff for vulnerable customers.”

It added, “In order to decrease the regressivity of electricity subsidies, move towards a full cost reflective tariff system which includes a limited and uniform subsidy for all customers in 2025 while the metering gap is being closed. This scheme can take the form of a uniform monthly subsidy per customer, or the first 50 kWh per month being subsidised.”

A key focus of the reform is closing Nigeria’s metering gap, which currently stands at approximately seven million unmetered electricity end-users.

The government outlined a plan to install 1.5 million smart meters in 2025, four million in 2026, and 1.5 million in 2027.

The closure of the metering gap is expected to minimise losses in the sector, improve revenue collection efficiency, and ensure that tariffs are aligned with actual consumption, thereby reducing the need for future subsidies.

The electricity sector has struggled with financial sustainability due to high technical and commercial losses, low tariff recovery rates, and liquidity constraints.

Despite efforts under the Power Sector Recovery Programme, tariff shortfalls reached N650bn in 2023 and are expected to rise further in 2024, potentially exceeding N2.2tn.

The subsidy scheme would provide temporary relief while ensuring that distribution companies meet their financial obligations to power generation companies and the Transmission Company of Nigeria.

Source: https://punchng.com/FG-To-Spend-600m-Yearly-On-Electricity-Subsidy

Ok

expect Electricity bill to triple in d coming months. Subsidy is gone again...

Tinubu Don naked swear say everybody go hear am laslas for calling him Bulaba.

Will this reduce the price of meter and also the price of estimated bill

2027 election politics.

Tinubu must be booted out come 2027

Lies again. Tell me another story. Just to increase electricity price

Give us Fuel subsidy and take the electricity subsidy

2025-2027, No be politics be dis!

600 million dollars
Money na water.

You put a criminal in charge of the Treasury where trillions flow in everyday and expect him to have self control?

who are they subsidizing it for kwanu 🙄

All this outrageous figures just to make the masses believe they’re doing them favour. The heart of a man is naturally wicked.

Dey play

Why would FEDERAL GOVERNMENT subsidise a service that is not rendered? As far as I am concerned, EEDC is a specialist in darkness.

ValarDoharis:
2027 election politics.

Tinubu must be booted out come 2027

He is already feeling jittery, I thought he doesn't believe in subsidy, incompetent fellow, all countries subsidize energy especially petrol and gas cos it controls production and economy, this evil man came on instead of him to make it partial subsidy he removed everything, from the first of this evil man in Aso Rock Nigerians have been passing through hell, Nigerians are very hungry, improvished, hope have disappeared. He will finish four years with nothing to show for it.

When you use solar power, you wouldn't have need for pseudo electricity subsidy

shedy03:
2025-2027, No be politics be dis!

They are afraid, he knows Nigerians are not with him

Very funny 🤣🤣🤣
Only a foolish person will take anything serious from APC government

How bout they use the 600million dollars to subsidize solar and inverter for Nigerians?

Why are they subsidizing darkness?


Lot of areas apart from band A hardly get 10hrs of light upon the estimated billing because majority don't have prepaid yet.

What kind of madness is this?

Abapower no follow for beneficiary of the subsidy? Band E customers in abapower are paying 145 naira per kwh.

Are we band A still paying subsidy?

The only thing government should be subsidizing is something that every citizen benefits from, example fuel. There are millions of Nigerians that don't have electricity in there homes.

Tomorrow they will come and tell us about some cabals in the power sector.

Government should subsidize agro products instead, since everyone wants cheap and quality food

whytediamond:


Bunch of Jokers. Our electricity billing per kilowatt is one of the highest in Africa, yet you say you subsidise power.

Getting a prepaid meter will cost you close to 200k

WTF are they subsiding?

Omor, I thought GEJ was a terrible leader.

Wish one could see the near future.

The difference 10years could make is still a wonder. What a country.

If you have nothing logical to post zip up and stop constituting nuisance of this platform.

Why subsidizing Electricity, it should be fuel subsidy. Again Tinubu has shown his brainless skull. You took away fuel subsidy, fuel that power every aspect of the economy for electricity that's not available.

We don't need subsidy on electricity, just use that money to subsidize cooking gas

Who are y'all deceiving?

Na them them go pack the money chop.

Nigeria My Country

Pay Electricity subsidy again? After the subsidy has been removed, making citizens pay up to 50k in electricity bills monthly as against the previous 5k.

Darkness subsidy is the way out now. Before that it was petrol dispensing queues we were subsidising.
$1.64m or N2.5Bn a day.

On which electricity? The ones that is non-existent?