Olu Verheijen, the president’s special adviser on energy, has said the federal government currently spends N200 billion on electricity subsidies monthly.
“Today, the Federal government spends over ₦200 billion per month on electricity subsidies, but much of this support benefits the wealthiest 25 percent of Nigerians rather than those who truly need assistance,” she said.
She also explained how the federal government is subsidising electricity in 2025.
In a press statement on Monday, she said clarifying media reports suggesting an imminent 65 percent increase in electricity tariffs has become necessary.
According to her, it is a misrepresentation of what I said in a recent press interview. I highlighted that, following the increase in Band A tariffs in 2024, current tariffs now cover approximately 65 percent of the actual cost of supplying electricity, with the Federal government continuing to subsidize the difference.
The special adviser said also, that while the government is indeed committed to ensuring fairer pricing over the long term, the immediate focus is on taking decisive action to deliver more electricity to Nigerians, ensure fewer outages, and guarantee the protection of the poorest and most vulnerable Nigerians.
In line with these, the federal government’s power sector priorities include the Presidential Metering Initiative (PMI). One of the most significant steps in this reform is the Presidential Metering Initiative, which will accelerate the nationwide rollout of 7 million prepaid meters starting this year.
She continued: “This will finally end the practice of estimated billing, giving consumers confidence in what they are paying for and ensuring transparency in electricity charges.
“Metering will also improve revenue collection across the sector and attract the investments needed to strengthen Nigeria’s power infrastructure. Targeted Electricity Subsidies:
“To address this, the Federal government is working towards a targeted subsidy system to ensure that low-income households receive the most support. This approach will make electricity more affordable and accessible for millions of hardworking families. Settlement of Legacy Power Debt: Furthermore, the Federal government is addressing one of the major roadblocks to improved service, the mounting debts owed to power generation companies. For years, these debts have prevented investments in new infrastructure and hampered efforts to improve electricity supply.
“By clearing these outstanding obligations, the government is ensuring that power companies can reinvest in better service delivery, stronger infrastructure, and a more stable electricity supply for all Nigerians. Reducing Costs for Alternative Power Generation: Through a range of fiscal incentives, including VAT and Customs Duty Waivers, the Federal Government is working to lower the cost of alternative power sources such as Compressed Natural Gas and liquid petroleum Gas.
“The government fully understands the economic realities facing citizens and is committed to ensuring that reforms in the power sector lead to tangible improvements in people’s daily lives. Every policy is designed with the Nigerian people in mind — eliminating unfair estimated billing, ensuring that subsidies benefit the right people, and creating the conditions for stable, affordable electricity.
“These reforms are laying the foundation for better service delivery, expanded access to electricity for homes and businesses, and unlocking prosperity for all Nigerians.”
