President Bola Tinubu’s government has confirmed a new plan to remove the current electricity subsidy of 15 per cent being on enjoyed by consumers in the country.⁣

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According to Bayo Onanuga, special adviser to President Tinubu on information and strategy, the move would save the government about N1.1 trillion annually.

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Onanuga said the Bola Tinubu-led administration was poised to allow the price hike in electricity given its N450 billion budget for energy subsidies in 2024. ⁣

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Power distribution companies will be allowed to increase prices from N68 to N200 per kilowatt-hour for urban consumers in April.

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Onanuga explained that the country last reviewed electricity tariffs in 2020, and the planned increase would enable Discos to recover costs and improve investments.

“The regulator will make any pronouncements based on its discussion with the distribution and generating companies. The presidency cannot say anything at this stage,” Onanuga said.

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“With the huge subsidy burden and high cost of gas…the current electricity tariff is not realistic,” he told Bloomberg.

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Onanuga said the tariff hike would affect only 15 per cent of consumers, accounting for 40% of electricity consumption. ⁣

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He said the federal government would help power generating companies to offset about N1.5tn debts they owe the country’s bulk electricity buyer.⁣

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An electricity report released by the National Bureau of Statistics on Monday showed that electricity distribution companies in Nigeria saw their revenues surge to N1.1tn in 2023.⁣ This is despite the persistent epileptic power supply nationwide.⁣

Nigeria’s national power grid collapsed 46 times from 2017 to 2023, a report by the International Energy Agency (IEA) revealed.⁣

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The IEA said Nigerians endured more nationwide blackouts in 2023, especially on September 14 when the grid collapsed due to a fire on a major transmission line.