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Minister of Power, Adebayo Adelabu, has said Nigerians should brace for higher electricity tariffs as the government can no longer sustain the current subsidy regime.

Speaking at a meeting with the leadership of power generating companies (GenCos) in Abuja, Adelabu emphasized the need for cost-reflective tariffs to ensure the stability of the power sector. He stated that while the Federal Government will continue to provide targeted subsidies for economically disadvantaged citizens, the broader subsidy burden is unsustainable. However, he did not provide details on who qualifies as economically vulnerable.

The minister revealed that the government owes GenCos over N4 trillion in unpaid subsidy arrears and is planning to offset a large portion through a mix of cash payments and promissory notes. “We must pay a substantial amount in cash and issue debt instruments for the rest,” Adelabu said.

According to the Nigerian Electricity Regulatory Commission (NERC), while the actual electricity cost in February stood at N116.18/kWh, consumers paid an average of N88.20/kWh—leaving a N27.97/kWh subsidy gap. Currently, only about 15% of customers on Band A pay full rates.

Chairman of Mainstream Energy Solutions, Col. Sani Bello (retd.), warned that the debt burden threatens to collapse the entire power ecosystem. He said the liquidity crisis has left GenCos unable to maintain infrastructure or access credit.

Kola Adesina, chairman of Egbin Power and First Independent Power Limited, called the situation a national emergency, stressing that stable electricity is critical for homes, hospitals, and industries.

Dr. Joy Ogaji, CEO of the Association of Power Generating Companies, highlighted further challenges including gas supply issues, forex instability, and rising maintenance costs worsened by the naira’s sharp depreciation.

A meeting is expected soon between President Bola Tinubu and the GenCos, where the government will present a proposal aimed at clearing the debt and preventing further breakdown of Nigeria’s fragile power supply chain.