The Federal Government has revealed that it spends approximately N200 billion per month on electricity subsidies, a benefit that disproportionately favors the wealthiest 25% of Nigerians rather than those in real need.

The Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, disclosed this in a statement on Monday while addressing reports that electricity tariffs would soon increase by two-thirds.

Clarifying Tariff Hike Speculations

Verheijen denied claims that she explicitly stated a 65% increase in electricity tariffs but acknowledged that current tariffs cover only 65% of the actual cost of supplying power. The Federal Government continues to subsidize the remaining cost, she added.

“It has become necessary to clarify media reports suggesting an imminent 65% increase in electricity tariffs. This is a misrepresentation of what I actually said in a recent press interview. Following the increase in Band A tariffs in 2024, current tariffs now cover approximately 65% of the actual cost of electricity supply, with the government subsidizing the difference,” Verheijen explained.

Targeted Subsidy System for Low-Income Households

To ensure fairness, the government is working towards a targeted subsidy system that will prioritize support for low-income households while reducing benefits for wealthier consumers.

“Much of the current N200bn monthly subsidy benefits the wealthiest 25% rather than those who truly need assistance. We are working on a new system to ensure that low-income families receive the most support, making electricity more affordable and accessible to millions of hardworking Nigerians,” she stated.

Addressing Metering & Electricity Billing Transparency

Concerns have been raised about unmetered consumers potentially paying for electricity they do not use if a tariff increase occurs. In response, the government is accelerating the rollout of seven million prepaid meters under the Presidential Metering Initiative.

Verheijen emphasized, “This initiative will end estimated billing, giving consumers confidence in their payments while ensuring transparency in electricity charges. Additionally, metering will improve revenue collection and attract investments to strengthen Nigeria’s power infrastructure.”

Clearing Power Sector Debts & Boosting Investment

She also highlighted that mounting debts owed to power generation companies have stalled investments and weakened service delivery. The government is now taking steps to settle outstanding obligations to encourage reinvestment in infrastructure and enhance electricity supply nationwide.

Additionally, to ease energy costs, the Federal Government is introducing fiscal incentives, including VAT and Customs Duty Waivers, to reduce the price of alternative power sources such as Compressed Natural Gas (CNG) and Liquified Petroleum Gas (LPG).

Public Backlash Over Proposed Tariff Hike

The Human Rights Writers Association of Nigeria (HURIWA) has strongly opposed any electricity tariff increase, warning that it could trigger widespread public unrest.

HURIWA’s National Coordinator, Emmanuel Onwubiko, criticized the move as "toxic, unconstitutional, and a direct assault on the economic survival of Nigerian citizens." He argued that amid the ongoing economic hardships, raising electricity costs would further burden struggling households and businesses.

Ensuring Stable & Affordable Electricity for Nigerians

Despite public concerns, the government insists that ongoing power sector reforms aim to provide stable, affordable electricity, eliminate unfair estimated billing, and ensure subsidies reach those who need them most.

Verheijen assured, “Every policy is designed with the Nigerian people in mind. These reforms lay the groundwork for better service delivery, expanded electricity access, and economic growth.”