FG urged to scrap electricity subsidies for all customers
The call for a complete removal of electricity subsidies has intensified as energy sector stakeholders argue that the policy is no longer sustainable and is distorting the power market.
The Managing Director and Chief Executive Officer of the Niger Delta Power Holding Company (Nigerian power generation company) has urged the Federal Government of Nigeria (federal executive government of Nigeria) to end subsidies for all electricity consumers in order to strengthen the financial viability of the sector and attract greater private investment.
According to the power sector chief, subsidies have created liquidity challenges within the electricity value chain, discouraging investment and hindering improvements in service delivery. She noted that a shift toward cost-reflective tariffs would help utilities recover operational expenses and expand infrastructure, ultimately leading to more stable electricity supply.
Stakeholders also point to structural challenges such as gas shortages and transmission bottlenecks, which continue to limit the availability of reliable power despite ongoing reforms. Advocates of subsidy removal argue that government funds spent on electricity support could be redirected toward critical social programs and infrastructure development. However, critics of the proposal warn that scrapping subsidies could result in higher electricity tariffs for households and businesses already grappling with economic pressures.
They call for a phased approach that balances market reforms with targeted assistance for low-income consumers to mitigate the impact of tariff adjustments.
The debate comes amid broader efforts to reform Nigeria’s power sector, with regulators and policymakers exploring ways to improve efficiency and investment.
The Nigerian Electricity Regulatory Commission (power sector regulator in Nigeria) continues to oversee tariff structures and market rules, emphasizing the need for sustainable solutions that encourage private sector participation while safeguarding consumer interests.
