FG Hints at Fresh Electricity Tariff Hike Amid Mounting ₦5 Trillion Power Sector Debt

ABUJA, NG — July 9, 2025 | IDNN Business & Energy Desk

The Federal Government has hinted at a fresh round of electricity tariff hikes across the country as it scrambles to address a crippling ₦5 trillion debt choking Nigeria’s power sector.

Minister of Power Adebayo Adelabu, speaking during the Mission 300 Stakeholders’ Engagement in Abuja on Tuesday, said the government is developing a strategy to transition from universal subsidies to a fully cost-reflective pricing regime — a move that could significantly raise power bills for millions of Nigerians.

“We’re committed to long-term sustainability and bankability of the power sector,” Adelabu said. “This requires aligning tariffs with actual costs, while protecting the vulnerable.”

 ₦5 Trillion Sector Debt Breakdown

Adelabu disclosed:

• ₦4 trillion in outstanding debt owed to generation companies (GenCos) due to unpaid subsidies

• An additional ₦1.1 trillion accrued in H1 2025, pushing the total above ₦5 trillion

• Widening gaps between cost of supply and allowed tariffs approved by NERC

“This mismatch is unsustainable,” Adelabu noted. “We’re designing a pricing system where subsidies are targeted and the broader system recovers its costs.”

Critics Say Nigerians Are Being Shortchanged

The policy proposal has sparked immediate backlash from consumer rights advocates and energy analysts, who argue that raising tariffs without fixing service delivery failures amounts to exploitation.

“Between 2015 and now, we’ve added only about 400MW to the grid,” said Kunle Olubiyo, President of the Nigeria Consumer Protection Network. “There’s been no proportional improvement in transmission or distribution despite tripled revenue.”

Bode Fadipe, CEO of Sage Consulting, added:

“The issue isn’t just tariffs. It’s misalignment in policy, lack of transparency, and infrastructure collapse.”

 “We Only Get 6 Hours of Power Daily” – Consumers

From Gwagwalada to Kano, consumers report worsening blackouts despite higher billing. One Band C consumer, Abubakar Aliyu, told IDNN his community often receives less than 6 hours of electricity per day.

“They want us to pay more when we live in darkness. The DisCos are unresponsive, and the grid remains unstable,” he said.

 FG Says Structural Reform Is Coming

Adelabu defended the broader reform effort, saying the ministry is targeting:

• Liquidity restructuring

• Renewable energy expansion

• Grid stability

• Rural electrification

• Private sector partnerships

Finance Minister Wale Edun, speaking virtually from Brazil, said reforms have already led to a 40% increase in power distribution in Q1 2025.

“This is about moving from policy talk to real impact,” Adelabu concluded.

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