Nigerians may have to prepare for fresh economic pressures as the Federal Government has unveiled plans to phase out electricity subsidies from 2027, a move expected to reshape the country’s power sector and potentially increase the cost of electricity in the years ahead.
The Minister of Power, Joseph Tegbe, announced the policy on Friday during a media interactive session, describing it as part of sweeping reforms aimed at addressing mounting financial liabilities and placing the electricity industry on a sustainable commercial footing.
Although the minister ruled out any immediate increase in electricity tariffs, the planned withdrawal of subsidies has raised concerns that consumers could eventually bear a greater share of electricity costs once the transition begins.
Tegbe assured Nigerians that the reform would be implemented gradually and would not deprive vulnerable consumers of existing support.
“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.
He explained that the subsidy removal is part of broader efforts to eliminate the huge fiscal burden created by government intervention in the electricity sector, which has strained public finances for years.
To cushion the impact of the policy, the minister said the Power Consumer Assistance Fund would be deployed to provide targeted support for low-income and vulnerable electricity users.
“The Power Consumer Assistance Fund will play a critical role in cushioning the impact on vulnerable consumers as we implement these reforms,” he added.
According to Tegbe, details of the implementation timetable and additional consumer protection measures will be unveiled as the reform process progresses.
The planned subsidy withdrawal comes amid widespread concerns over the rising cost of living, with many Nigerians already grappling with inflation, high transport fares and escalating food prices.
While the government insists there will be no immediate tariff increase, the decision signals further reforms that could translate into higher electricity costs over time as the sector moves towards full cost recovery.
For many households and businesses already struggling with economic hardship, the announcement suggests that more difficult adjustments may lie ahead, even as the government argues that the reforms are necessary to build a financially viable and reliable electricity industry.
