FG to Phase Out Power Subsidy Payments From 2027 — Minister

By Queen Madaki

The Federal Government has announced plans to gradually phase out subsidy payments in the electricity sector from 2027 as part of efforts to address mounting financial pressures and accumulated debts in the power sector.

The Minister of Power, Joseph Tegbe, disclosed this on Friday during a media interactive session while speaking on the government’s efforts to tackle the debt crisis affecting the sector.

Power Subsidy to Be Gradually Removed

According to the minister, the government intends to begin the gradual removal of electricity subsidies from 2027, although he assured Nigerians that the policy would not deprive citizens of the benefits they are currently entitled to.

Tegbe explained that the planned transition would be implemented in a manner that addresses the financial challenges facing the power sector while protecting the interests of electricity consumers.

The minister’s announcement comes amid continuing concerns over the financial sustainability of Nigeria’s electricity market, including the accumulation of debts across the power value chain.

FG Rules Out Immediate Tariff Increase

Despite the planned changes to subsidy payments, the Minister of Power reiterated that there is no immediate plan by the Federal Government to increase electricity tariffs.

He said Nigerians should not expect an immediate tariff hike, suggesting that the government is focused on addressing the underlying challenges in the power sector while ensuring that consumers are not subjected to additional financial pressure in the short term.

The Federal Government’s proposed subsidy phase-out is expected to generate further discussions about the future of electricity pricing, sector financing and the sustainability of power supply in Nigeria.

The government is expected to provide further details on the implementation of the policy as it moves towards the planned 2027 transition.

The Bureau Journal reports that the planned removal of power subsidies would mark another significant change in the Federal Government’s approach to financing the electricity sector, coming at a time when authorities are seeking long-term solutions to the sector’s financial and operational challenges.