The Federal Government has announced a 35% cut in electricity subsidies, following a significant tariff increase for Band A consumers—those who receive up to 20 hours of electricity daily.
Under the new policy, Band A customers will now pay ₦225 per kilowatt-hour, up from ₦68, marking a 240% increase. The move, according to authorities, is aimed at cutting down on Nigeria’s mounting energy debts and reducing pressure on public finances. The government estimates that the subsidy reduction could save ₦1.2 trillion annually, down from the projected ₦3.3 trillion.
“This is a necessary but painful step,” said Dr. Abdul Mohammed-Noah, energy economist. “For decades, our power sector has survived on unsustainable subsidies.”
Key Changes at a Glance
| Metric | Before | After |
|---|---|---|
| Tariff for Band A | ₦68/kWh | ₦225/kWh |
| Monthly Subsidy Cost | ₦275 billion | ₦175 billion |
| Annual Subsidy Estimate | ₦3.3 trillion | ₦2.1 trillion |
| Band A Users | ~1.5 million | 15% of grid |
While the government insists the hike affects only a “minority” with stable power, many Nigerians are raising concerns, especially given the current economic strain caused by high inflation, food prices, and unstable foreign exchange.
Despite the backlash, Minister of Power Adebayo Adelabu defended the move, claiming it will encourage private sector investment and help modernize the power sector. Plans are in place to reinvest savings into metering, grid expansion, and rural electrification.
Still, labour unions and civil society groups are warning of nationwide protests if the reforms are not matched with visible improvements in service delivery.