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Nigerians React as FG Signals Potential Electricity Tariff Increase

Published by Tope Fakinlede on July 10th, 2025.

Nigerians React as FG Signals Potential Electricity Tariff Increase

The Federal Government has revealed plans to implement a cost-reflective electricity tariff, a move intended to curb the growing N4 trillion debt burden in the power sector. This was disclosed by the Minister of Power, Adebayo Adelabu, during the Mission 300 Stakeholders’ Engagement in Abuja. According to him, the adjustment is necessary to place the sector on a path toward long-term sustainability and financial viability.

Despite a recent tariff hike for Band A customers, many electricity users continue to express dissatisfaction over unreliable power supply and the persistent issue of faulty infrastructure, which they are still being billed for.

Adelabu emphasized that aligning tariffs with actual service costs is vital for Nigeria’s economic development. Currently, Band E customers, for instance, face a sharp disparity between cost-reflective rates and the approved tariffs. For example, the cost-reflective rate for Band E – MD2 is N207.35, while the allowed tariff stands at only N55.43.

Consumer Concerns Mount

President of the Nigeria Consumer Protection Network, Kunle Olubiyo, told Daily Trust that increasing tariffs under current service conditions would amount to exploitation. He pointed out that while the band segmentation model has significantly boosted revenue for DisCos, it hasn’t translated into improved generation, transmission, or distribution.

Olubiyo noted that since 2015, Nigeria has only managed to add 400MW to its electricity capacity. “Under Jonathan, we reached a generation and distribution level of around 5,600MW. Nearly a decade later, we haven’t made meaningful progress,” he said.

He also stressed the need for policy sensitivity, cautioning the government against simultaneous economic shocks that may carry unintended political consequences. “Reform is necessary, but it must not come at the cost of social equity or service obligations,” he warned.

Liquidity, Investment Still Key Challenges

Bode Fadipe, CEO of Sage Consulting & Communications, pointed out that liquidity remains a fundamental challenge in the power sector, stifling investment and growth. He questioned whether merely adjusting tariffs without parallel sector performance improvements would yield meaningful change.

“Cost-reflective pricing alone won’t solve the sector’s structural issues,” Fadipe argued. “Why aren’t we focusing equally on policy reforms, infrastructure development, and performance accountability?”

He further criticized the performance gap for Band A customers, who are promised 20 hours of power but frequently receive far less.

Consumers Demand Improved Service Before Tariff Hike

Electricity users across different bands are pushing back against the proposed hike, citing the poor state of service. Abubakar Aliyu, a Band C customer in Gwagwalada, complained about receiving under six hours of power daily, sometimes experiencing complete blackouts.

“The service is inconsistent and unreliable. How can tariffs go up when the quality of supply is this poor? If the government plans to increase rates, they should first ensure DisCos can deliver on their service commitments,” he said.