FG Opens Up on Rumoured 65% Hike in Electricity Tariff, Says N200bn Spent on Subsidy Monthly

• The federal government says it spends N200 billion on electricity subsidies for Nigerians monthly
• SA to the President on Energy, Olu Verheijen also cleared the air on the reported 65% hike in electricity tariffs
• Verheijen noted that the government is committed to working out a fair pricing plan that will not impose on the poorest Nigerians

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

The Nigerian presidency has said that the government currently spends about N200 billion monthly on electricity subsidies.

This is despite the removal of subsidies for consumers under the Band A feeder and the subsequent increase in their tariffs.

The Special Adviser to the President on Energy (Nigeria), Ms. Olu Verheijen disclosed this in a statement on her verified X (formerly Twitter) handle.

FG speaks on 65% tariff increase

Read also

Telecom tariffs: Stakeholder lists three things FG must do to prevent further increase

Ms. Verheijen further cleared the air on media reports suggesting an imminent 65% hike in electricity tariffs. She stated that the reports had misinterpreted her words.

According to Verheijen, the increase of band A tariffs last year, resulted in a new pricing that only covers 65% of the production cost, leaving the federal government to cover the difference.

This was what reports interpreted as an imminent 65% tariff increase. She noted that while the government is committed to ensuring a fair pricing system for electricity in Nigeria, it would also be taking steps to protect the poorest and most vulnerable Nigerians.

She said;

“Right now, ₦200 billion per month is spent on electricity subsidies, but the wealthiest 25% of Nigerians receive the biggest share. To address this, we are working towards transitioning to a targeted subsidy system that ensures that low-income households receive the most support.”

Read also

Nigerians react as FG plans fresh electricity tariff hike

The complete removal of electricity subsidies, experts say, may result in more financial burden on Nigerians just like the removal of other subsidies.

Recall that President Bola Tinubu recently defended the removal of FX and fuel subsidies, saying that they created a false reality for Nigerians and enabled them to adopt unaffordable living standards.

New pricing plan for electricity in Nigeria

Verheijen, who is also an energy expert, threw more light on the proposed energy reforms for Nigeria.

She explained that by removing VAT and Customs Duties on cleaner fuel alternatives like Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG), the government is providing Nigerians with cleaner and cheaper energy sources to power homes and businesses.

Verheijen added that the era of estimated billing will soon come to an end, as the government is releasing more than 7 million prepaid meters under the Presidential Metering Initiative.

Read also

FG set to earn N1.6trn, create 2 million jobs from 50% Telecom tariff hike

This will introduce transparency into the sector, and ensure that Nigerian consumers are paying for the energy they use.

FG plans fresh electricity tariff hike

In related news, Legit.ng reported plans to raise electricity tariffs from N116.18 to N193.63 per kilowatt-hour.

Coming a few months after implementing a 300% hike in electricity tariffs, the suggestions met with rash reactions from Nigeria on social media.

The government, however, said it would introduce subsidies that will protect low-income Nigerians.

Source: Legit.ng