The federal government will phase out electricity subsidies starting in 2027. This transition aims to clear substantial legacy debts crippling the power sector. Concurrently, the administration plans to implement robust support structures to protect vulnerable consumers.
This policy shift will move the national electricity market toward cost-reflective tariffs. The transition intends to align market pricing more closely with actual operational expenses. These expenses include the generation, transmission, and distribution of electricity.
Minister of Power Joseph Tegbe stated that consumer prices will not jump immediately. He noted there is currently no plan to increase tariffs alongside the initial subsidy phase-out.
The broader reform aims to stop new subsidy-related liabilities from accumulating across the power sector. The government has historically subsidized the financial gap between actual electricity costs and consumer payments. Ultimately, the administration intends to end this practice entirely.
