Nigerian Energy Advisor Clarifies Tariff Increase Comments Amid Ongoing Reforms
In a recent statement, Olu Verheijen, the special adviser to President Bola Tinubu on energy, addressed the controversy surrounding her remarks about electricity tariffs in Nigeria. On January 30, reports suggested that Verheijen indicated a need for a significant 66 per cent increase in power prices to reflect the true cost of electricity supply for many consumers.
However, Verheijen has since clarified that her comments were misrepresented. In a statement issued on Monday, she emphasized that following the 2024 Band A tariff increase, current electricity tariffs now cover approximately 65 per cent of the supply cost. The government continues to subsidize the remaining 35 per cent to ensure affordability for consumers.
“I highlighted that, after the increase in Band A tariffs, tariffs now cover about 65 per cent of the actual cost of electricity supply, with the Federal government subsidizing the difference,” Verheijen explained. She reassured Nigerians that while the government aims to establish fairer pricing in the long run, the immediate focus remains on increasing electricity supply, reducing outages, and protecting the most vulnerable citizens.
Verheijen outlined the federal government’s commitment to improving Nigeria’s power sector, which includes the launch of the Presidential Metering Initiative (PMI). This ambitious program aims to deploy 7 million prepaid meters across the nation, eliminating the controversial practice of estimated billing. “This initiative will enhance consumer confidence and transparency in electricity charges, while also improving revenue collection and attracting investment to strengthen Nigeria’s power infrastructure,” she stated.
Addressing the financial aspect of electricity subsidies, Verheijen revealed that the federal government currently spends over ₦200 billion monthly to subsidize electricity costs. However, she noted that this support disproportionately benefits the wealthiest 25 per cent of Nigerians rather than those in dire need. To rectify this, the government is working towards a targeted subsidy system aimed at assisting low-income households, making electricity more affordable for millions of families.
Verheijen also highlighted the government’s efforts to tackle longstanding debts owed to power generation companies, which have hindered investments in infrastructure and service improvements. By addressing these legacy debts, the government aims to enable power companies to reinvest in better service delivery and a more stable electricity supply for all Nigerians.
Additionally, the government is implementing fiscal incentives, such as VAT and Customs Duty waivers, to lower costs for alternative power sources like Compressed Natural Gas and Liquified Petroleum Gas.
