Electricity subsidy may hit N2tn amid tariff freeze

The Federal Government may spend N2 trillion on electricity subsidies this year as it refuses to immediately raise electricity tariffs, according to Minister of Power Joseph Tegbe. Tegbe shared the government's stance during a media briefing in Abuja on Monday, marking his first 100 days in office. He emphasized that the aim is to establish a commercially viable power sector while protecting vulnerable consumers.

The subsidy obligation, which totaled N1.93tn in 2025, represented 57.44% of the Nigerian Bulk Electricity Trading invoice and averaged N160.69bn monthly. The government covered the subsidy gap due to electricity tariffs remaining below cost-reflective levels. With no plans to increase tariffs, the subsidy burden could remain around N2tn this year, similar to previous years.