31/07/2026
FG to Phase Out Power Sector Subsidy from 2027, Rules Out Immediate Tariff Hike
The Federal Government has announced plans to gradually phase out electricity subsidies beginning in 2027 as part of ongoing reforms aimed at making Nigeria's power sector more financially sustainable.
The Minister of Power, Joseph Tegbe, disclosed this during a media parley with journalists in Abuja on Friday, July 31, 2026.
According to the Minister, the planned subsidy removal will be implemented in phases to minimize its impact on Nigerians. He assured citizens that the government remains committed to protecting consumers and ensuring they continue to benefit from ongoing improvements in electricity supply.
Tegbe also clarified that there are no immediate plans to increase electricity tariffs, stressing that the current focus is on improving efficiency, reducing losses, and strengthening the financial viability of the power sector.
Nigeria's electricity industry has for years relied heavily on government subsidies to bridge the gap between the actual cost of generating and transmitting electricity and the amount distribution companies recover from consumers. The growing subsidy burden has placed significant pressure on public finances, prompting the government to pursue long-term reforms.
The planned phase-out is expected to encourage greater investment in the power sector while improving cost recovery and service delivery. However, the government says the transition will be carefully managed to avoid undue hardship on electricity consumers.
Further details on the implementation framework are expected to be released ahead of the 2027 commencement date.