Federal Government to Phase Out Electricity Subsidies from 2027, Says No Immediate Tariff Increase

The Federal Government’s electricity subsidy phase-out will begin in 2027 as part of ongoing reforms aimed at addressing mounting financial liabilities in Nigeria’s power sector.

The announcement was made by the Minister of Power, Joseph Tegbe, during a media interactive session on Friday, where he outlined the government’s plans to strengthen the long-term sustainability of the electricity industry.

According to the minister, the planned electricity subsidy removal is part of broader reforms designed to create a commercially viable power sector without abruptly removing existing support for consumers.

Tegbe assured Nigerians that although the government intends to phase out electricity subsidies from 2027, there are no immediate plans to increase electricity tariffs.

He explained that the reforms are intended to reduce the fiscal burden created by electricity subsidies while ensuring that consumers, particularly vulnerable households, continue to receive adequate protection.

Speaking on the proposed policy, the minister said:

“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.”

He added that the Power Consumer Assistance Fund would play a central role in cushioning the impact of the reforms on low-income and vulnerable electricity consumers as the transition progresses.

According to Tegbe, the Federal Government will provide additional details on the implementation timeline, consumer protection measures and other aspects of the reform programme as the process advances.

The minister noted that Nigeria’s electricity subsidy has continued to place significant pressure on public finances, making reforms necessary to improve the financial stability and efficiency of the country’s power sector.

The planned electricity subsidy phase-out from 2027 is expected to form a key component of the Federal Government’s broader strategy to strengthen electricity generation, transmission and distribution while balancing fiscal responsibility with consumer welfare.