FG announces plans to phase out electricity subsidy from 2027

The Federal Government has announced plans to begin the gradual removal of electricity subsidies from 2027, assuring Nigerians that the move will not lead to an immediate increase in electricity tariffs.

The disclosure was made by the Minister of Power, Joseph Tegbe, during a media briefing in Abuja on Friday, where he explained that the subsidy phase-out forms part of the government’s ongoing reforms in the power sector.

According to the minister, the process will be implemented gradually to ensure that consumers are not stripped of the benefits they currently enjoy under the subsidy arrangement.

Tegbe stressed that the government has no plans to increase electricity tariffs in the near future, despite its decision to reduce subsidy payments over time. He explained that the reform is aimed at easing the financial burden on the Federal Government while improving the sustainability of Nigeria’s electricity sector.

For years, Nigeria’s power sector has struggled with a huge funding gap created by the difference between the actual cost of generating and transmitting electricity and the amount distribution companies recover from consumers.

To keep the sector running, the Federal Government has continued to bridge the shortfall through subsidy payments.

However, the government now intends to gradually reduce its subsidy obligations from 2027 as part of efforts to achieve a more sustainable electricity market.