The Federal Government has announced plans to begin a gradual phase-out of electricity subsidies from 2027 as part of sweeping reforms aimed at reducing the financial burden on the nation’s power sector.
Minister of Power, Joseph Tegbe, disclosed the plan during a media briefing in Abuja on Friday, assuring Nigerians that the move would not trigger an immediate increase in electricity tariffs.
Tegbe stressed that while the government intends to steadily reduce subsidy payments beginning in 2027, electricity consumers will continue to enjoy existing benefits under the current subsidy framework during the transition.
He also dismissed concerns over an imminent tariff hike, insisting that there are no plans to increase electricity tariffs in the near future despite the proposed subsidy phase-out.
Nigeria’s electricity sector has long grappled with a significant funding deficit caused by the gap between the actual cost of power generation and transmission and the revenue recovered by electricity distribution companies from consumers.
To sustain the sector, the Federal Government has consistently intervened with subsidy payments to bridge the shortfall. However, under the new reform agenda, the government plans to gradually reduce its subsidy obligations from 2027 while pursuing a more financially sustainable electricity market.
The announcement signals a major shift in the Federal Government’s strategy to reform the power sector, with authorities maintaining that the transition will be carefully managed to protect consumers from sudden tariff shocks.
