The Federal Government of Nigeria has eliminated the electricity subsidy for consumers on Band A feeders, triggering widespread backlash amid ongoing economic challenges. Despite public outcry following the recent removal of petrol subsidies, the government moved to address mounting debts in the electricity sector by discontinuing the subsidy. The decision, spearheaded by Power Minister Adebayo Adelabu, aims to transition towards a cost-reflective tariff system to ensure the sustainability of the power sector.
Initially proposed in January, the removal of the electricity subsidy faced delays, but stakeholders eventually advocated for a shift towards cost-reflective tariffs. Adelabu emphasized the government’s inability to sustain the subsidy amid escalating power debts, which had reached approximately N1.3 trillion owed to electricity generating companies and $1.3 billion to gas companies.
Despite opposition from the Senate, which passed a resolution against the tariff hikes and subsidy removal, the government proceeded with its decision. Band A consumers now face a tariff increase of about 240%, with rates soaring from N68/kWh to N225/kWh. This move has elicited criticism from various quarters, with concerns raised over its impact on Nigerians already grappling with economic hardships.
Moreover, discrepancies in billing and supply have emerged, with some customers reporting overbilling and inadequate power supply relative to their Band A status. In response, the Nigerian Electricity Regulatory Commission (NERC) has directed DisCos to refund overbilled customers and release a full list of Band A consumers.
The timing of the tariff hike has drawn condemnation, with many Nigerians still reeling from the effects of previous subsidy removals. Chief Whip of the Senate, Ali Ndume, criticized the decision, highlighting the lack of consultation with the National Assembly and the added burden on citizens.
Additionally, political figures such as those from the Afenifere group and the Peoples Democratic Party have accused the government of insensitivity and incompetence, urging President Tinubu to intervene and address the situation promptly. Amid growing discontent, calls for accountability and reconsideration of the tariff hike continue to resonate across the country.
