The Federal Government’s electricity tariff subsidy surged to nearly N2 trillion in 2024, representing a 219.67% increase from N610 billion in 2023.
Despite a tariff hike in April 2024, the subsidy obligation rose due to the naira’s depreciation and high inflation rates.
The Federal Government incurred a total electricity tariff subsidy of N1.94 trillion in 2024. Only N371.34 million (0.019%) of the N1.94 trillion subsidy obligation was paid.
Abuja DisCo received the highest subsidy allocation, followed by Ikeja and Ibadan DisCos.
The naira’s depreciation against the dollar led to increased costs for power generation and distribution.
Rising inflation rates contributed to higher costs for electricity production and distribution.
The Federal Government’s failure to fulfill its subsidy obligations has led to mounting debts across the value chain, with generation companies owed nearly N5 trillion.
The Power Minister has hinted at a possible increase in tariffs to address the subsidy burden.
