The Federal Government has revealed that it spends over ₦200 billion monthly on electricity subsidies, with a significant portion benefiting the wealthiest 25 percent of Nigerians rather than those who genuinely need financial support.
Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, disclosed this in a statement on Monday, clarifying recent reports about a possible electricity tariff hike.
Verheijen addressed speculation that electricity tariffs would soon be increased by 65 percent, stating that her previous comments had been misinterpreted.
“It has become necessary to clarify media reports suggesting an imminent 65 percent increase in electricity tariffs,” she said. “This is a misrepresentation of what I actually said in a recent press interview.”
According to her, the current tariff structure only covers about 65 percent of the actual cost of supplying electricity, with the Federal Government subsidizing the remaining amount.
Verheijen emphasized the government’s commitment to fairer electricity pricing over time, ensuring that support reaches low-income households rather than wealthier Nigerians.
“Today, the Federal Government spends over ₦200 billion per month on electricity subsidies, but much of this support benefits the wealthiest 25 percent of Nigerians rather than those who truly need assistance,” she stated.
“To address this, the government is working towards a targeted subsidy system that will prioritize low-income households, making electricity more affordable and accessible for millions of hardworking families.”
Addressing concerns about unmetered customers potentially paying for electricity they do not receive, Verheijen highlighted the Presidential Metering Initiative.
“One of the most significant steps in this reform is the Presidential Metering Initiative, which is accelerating the nationwide rollout of seven million prepaid meters, starting this year,” she explained.
According to her, this initiative will eliminate estimated billing, improve transparency in electricity charges, and enhance revenue collection across the sector.
Verheijen also acknowledged the mounting debts owed to power generation companies, which have hindered investments in new infrastructure and improved electricity supply.
“For years, these debts have prevented investments in new infrastructure and hampered efforts to improve electricity supply,” she said.
“By clearing these outstanding obligations, the government is ensuring that power companies can reinvest in better service delivery, stronger infrastructure, and a more stable electricity supply for all Nigerians.”
In addition to addressing subsidy challenges, Verheijen revealed that the Federal Government is implementing fiscal incentives, such as Value Added Tax and Customs Duty Waivers, to lower the cost of alternative energy sources like Compressed Natural Gas and Liquefied Petroleum Gas.
“The government fully understands the economic realities facing citizens and is committed to ensuring that reforms in the power sector lead to tangible improvements in people’s daily lives,” she said.
She assured Nigerians that ongoing reforms are designed to eliminate unfair estimated billing, ensure subsidies benefit the right people, and create conditions for stable, affordable electricity.
“These reforms are laying the foundation for better service delivery, expanded access to electricity, and unlocking prosperity for all Nigerians.”
