Korede Abdullah 
Minister of Power Joseph Tegbe .
LAGOS, Nigeria – The Federal Government says it will begin phasing out the electricity subsidy from 2027 as part of wider reforms to restore the financial sustainability of Nigeria’s power sector, while ruling out any immediate increase in electricity tariffs.
Minister of Power Joseph Tegbe announced the plan on Friday during a media interactive session in Lagos, saying the subsidy removal would be gradual to cushion consumers from sudden price shocks and maintain access to affordable electricity.
“The subsidy will be gradually removed, but Nigerians will not be deprived of any benefits,” Tegbe said.
“There is no plan to increase tariffs in the immediate term,” he said.
Tegbe explained that the phased withdrawal of the electricity subsidy forms part of broader efforts to address mounting debts within the Nigerian Electricity Supply Industry, improve market liquidity and attract greater private sector investment.
Nigeria’s electricity sector has struggled for years with inadequate funding, rising debts owed to electricity generation companies and gas suppliers, as well as a growing gap between the actual cost of electricity and the regulated tariffs paid by consumers.
To bridge that gap, successive governments have spent trillions of naira on subsidies to stabilise electricity prices and prevent higher tariffs for households and businesses.
The proposal would see about ₦3.6 trillion—equivalent to ₦1.2 trillion annually between 2026 and 2028—deducted directly from the Federation Account to finance electricity subsidies, with the financial burden shared across the three tiers of government.
According to the minister, the reforms are designed to strengthen the financial viability of the electricity market while protecting vulnerable consumers throughout the transition.
The planned changes also aim to improve electricity infrastructure, encourage investment in power generation and distribution, reduce market inefficiencies and deliver more reliable electricity supply nationwide.
About the Author
Mirian Gom 
Oluwatobi Adu 
Hussaini Ibrahim