FG May Spend Near N2tn On Electricity Subsidy This Year Amid Tariff Freeze

The Federal Government may spend about N2 trillion to subsidise electricity this year as it maintains its position against an immediate increase in electricity tariffs. Minister of Power Joseph Tegbe disclosed the government’s stance at a media parley in Abuja on Monday while marking his first 100 days in office, saying, “There are no immediate plans to increase electricity tariffs. Our goal is to build a commercially viable power sector while protecting vulnerable consumers.”

His position follows the N1.93tn electricity subsidy the Federal Government incurred in 2025, according to the Nigerian Electricity Regulatory Commission’s 2025 Annual Report, representing 57.44 per cent of the total Nigerian Bulk Electricity Trading invoice and averaging N160.69bn monthly. NERC said the subsidy arose because allowed tariffs remained below cost-reflective levels, with government covering the gap for all customers except Band A, which pays full cost.

Electricity generation companies, under the Association of Power Generation Companies, questioned the effectiveness of the Federal Government’s N4tn Presidential Power Sector Debt Reduction Programme, warning fresh liabilities exceeding N7tn could accumulate before the programme is fully implemented. APGC CEO Joy Ogaji said the subsidy arrangement exists “largely on paper” with no corresponding budgetary provision, and urged government to clearly define what it can afford and budget for it accordingly.

Tegbe said his first 100 days had focused on diagnosing sector-wide problems, including gas supply constraints from damaged pipelines, ageing generation infrastructure, and poor payment discipline, with generation companies receiving only 27 per cent of their bills. He said transmission infrastructure also remained under pressure from vandalised towers, overstretched equipment and frequent system tripping.