NewsNigeriaPoliticsNigeria Eyes End to Electricity Subsidy, Echoing Concerns From Fuel Price Hike

The Nigerian government has announced plans to phase out the electricity subsidy programme, a move that is likely to raise electricity prices for Nigerians.

This announcement comes just barely a year after the controversial removal of fuel subsidy, sparking concerns about affordability and potential economic strain on Nigerians.

Presidential spokesperson Bayo Onanuga justified the decision by citing the high cost of the subsidy program, estimated at N3.3 trillion annually.

The government argues that these funds could be better directed towards infrastructure development or social programs.

“With the huge subsidy burden and high cost of gas, the current electricity tariff is not realistic,” said Onanuga.

This announcement evokes memories of the public disquiet that followed the government’s removal of fuel subsidy in May 2023. The price of gasoline nearly tripled, leading to a rise in transportation costs and a general increase in the cost of living.

Critics of the proposed electricity subsidy removal fear a similar domino effect.

The Nigerian Senate previously rejected a similar proposal from the government, citing concerns about the impact on already struggling households. The high cost of living in Nigeria, including rising inflation, fuels anxieties about the ability of many Nigerians to afford higher electricity bills.

The government has acknowledged the potential challenges but insists the subsidy reduction is necessary for long-term benefits.

Onanuga said that when the electricity subsidy is cut, the government expected to save close to N1.1 trillion per year. He did not say exactly when the tariff increase would take effect or by what percentage electricity prices might rise.