FG Clarifies Position on Electricity Tariff Hike, Says N200bn Paid on Subsidy Monthly
The Federal Government has denied reports suggesting a 65% increase in electricity tariffs, calling them a misrepresentation. According to the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, the government continues to subsidize electricity costs despite an increase in Band ‘A’ tariffs, covering only 65% of the actual supply cost. The government currently pays N200 billion monthly to bridge the gap, which largely benefits wealthier Nigerians rather than those in need.
Verheijen emphasized that while long-term plans aim for fairer electricity pricing, the government’s priority is improving power supply, reducing outages, and protecting vulnerable Nigerians. Key initiatives include the Presidential Metering Initiative (PMI), which aims to roll out 7 million prepaid meters nationwide to eliminate estimated billing, enhance transparency, and improve revenue collection in the power sector.
To ensure a fair subsidy distribution, the government is working on a targeted subsidy system that will prioritize low-income households. Additionally, it is addressing outstanding debts owed to power generation companies, which have hindered new investments and infrastructure improvements. Clearing these debts is expected to stabilize electricity supply and enhance service delivery.
The government is also introducing fiscal incentives, such as VAT and customs duty waivers, to reduce the cost of alternative energy sources like Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG). These measures aim to make electricity more affordable and sustainable while promoting a transition to cleaner energy.
Verheijen reiterated the government’s commitment to ensuring that power sector reforms lead to tangible benefits for citizens, including fair billing, improved electricity access, and stable pricing. These initiatives, she noted, are essential to achieving long-term prosperity and energy security for Nigerians.
Source: THIS DAY