The Federal Government has announced plans to begin phasing out electricity subsidy payments starting in 2027.
The strategic move aims to eliminate mounting financial liabilities and establish long-term economic sustainability within the power sector.
Disclosing the development during a media interaction in Abuja, the Minister of Power, Joseph Tegbe, clarified that while the government is working toward a commercialised power market, no immediate rate hikes are planned for electricity consumers.
“The phase-out of electricity subsidies will begin from 2027. However, there are no immediate plans to increase electricity tariffs. Our goal is to build a commercially viable power sector while protecting vulnerable consumers,” Tegbe stated.
Balancing fiscal responsibility with consumer protection
The persistent funding of electricity subsidies has long placed a heavy strain on the national treasury. According to the Minister, transitioning away from the current subsidy structure is vital to attracting much-needed private capital and resolving structural liquidity constraints across the power value chain.
To cushion low-income households against potential price shocks, the government plans to leverage dedicated support frameworks:
The Power Consumer Assistance Fund will serve as a primary buffer to shield economically vulnerable citizens during the transition.
A comprehensive roadmap outlining the timeline and protective measures will be unveiled as the policy rollout nears.
The Ministry emphasised that electricity tariffs will remain stable in the short term while structural efficiency improvements are pursued.
Structural reforms for power market sustainability
The proposed subsidy exit aligns with ongoing broader power sector reforms under the current administration, aimed at enhancing grid reliability, upgrading transmission infrastructure, and expanding generation capacity nationwide.
Government officials maintain that establishing a self-sustaining electricity market is essential to powering industrial growth while ensuring that safety mechanisms remain active for households that require targeted assistance.
Read Also: Tragedy in Anambra: fallen power cable electrocutes three-year-old girl in Awka
