Experts: FG tariff freeze could deepen electricity market revenue pressure

The Federal Government's decision not to raise electricity tariffs in the near future could intensify revenue challenges for Nigeria's electricity market, according to experts. The Minister of Power, Joseph Tegbe, stated that there are no immediate plans to increase tariffs while the administration prioritises stabilising the electricity value chain and strengthening market discipline.

Industry experts and DisCo insiders, however, warn that this stance will exacerbate existing revenue concerns. Nigeria's electricity market already faces a significant financing gap, which has necessitated government subsidies and debt financing. The issue stems from the fact that DisCos can only increase collections to a limited extent through higher tariffs, as supplying electricity still costs more than what they recover from consumers.

Data from June 2026 shows that DisCos received electricity valued at N315.73 billion but collected only N191.86 billion, resulting in a N123.87 billion gap. Over the course of 2025, the 11 DisCos supplied electricity valued at N3.68 trillion, billed N2.99 trillion and collected N2.32 trillion, leading to a combined revenue gap of about N1.36 trillion.

Experts argue that without an immediate tariff increase, improving collections and reducing losses will be crucial for the market's financial health. The inefficiencies in metering, billing, payment discipline, and electricity supply are identified as key factors that could significantly impact the market's revenue position.