
Abuja, Nigeria – February 28, 2025 – The Federal Government of Nigeria has unveiled plans to review and potentially increase electricity tariffs for customers categorized under Bands B and C, sparking widespread concern among consumers and stakeholders. The announcement, made by the Minister of Power, Chief Adebayo Adelabu, comes as part of a broader strategy to address disparities in the current billing system and encourage investment in the nation's struggling power sector. The disclosure was made during the public presentation of the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan on Thursday, February 27, 2025, in Abuja.
Background and Rationale
Under Nigeria’s Service-Based Tariff (SBT) system, electricity consumers are grouped into bands based on the number of hours of power supply they receive daily. Band A customers, who enjoy a minimum of 20 hours of electricity, currently pay a cost-reflective tariff of N209 per kilowatt-hour (kWh). In contrast, Band B customers, receiving 16 to 18 hours of supply, pay N63 per kWh, while Band C customers, with 12 to 16 hours, pay even less. This significant pricing gap has been described as "unfair" by Minister Adelabu, who emphasized the need for a more equitable and sustainable pricing structure.
Speaking at the event, Adelabu highlighted that the slow migration of customers from Bands B and C to Band A—where they would receive more hours of electricity—has been hampered by the reluctance of Electricity Distribution Companies (DisCos) to invest in infrastructure upgrades. "The migration to Band A should have been faster, but we found out that the DisCos refuse to invest," Adelabu stated. He argued that regularizing tariffs across these bands would incentivize DisCos to improve service delivery and help bridge the gap between Bands A, B, and C.
The Minister also pointed to revenue growth as a motivating factor. He noted that the migration of some customers to Band A in 2024 led to a 70% increase in power sector revenue, rising from N1.05 trillion to N1.7 trillion. However, he clarified that the proposed tariff review does not necessarily mean an immediate hike, cautioning against misinterpretation. "I am not saying that we’re going to increase the tariff before I am misquoted," Adelabu stressed. "We will look at the tariff again to ensure it drives sector growth and upgrades aging infrastructure for a more reliable power supply."
Current Tariff Structure and Implications
The existing tariff structure has been a point of contention since its introduction. In 2024, the Nigerian Electricity Regulatory Commission (NERC) implemented a 300% tariff increase for Band A customers, raising rates from N68/kWh to N225/kWh (later adjusted to N209/kWh). This move was intended to reflect the true cost of electricity and reduce the government’s subsidy burden, which Adelabu revealed currently exceeds N200 billion monthly. However, Bands B and C have remained subsidized, with the government owing power generation and distribution companies over N4 trillion in unpaid subsidies.
The proposed tariff adjustment for Bands B and C could see these customers paying significantly more, aligning their rates closer to Band A’s cost-reflective model. While this could ease the financial strain on the government and power companies, it risks placing an additional burden on households and businesses already grappling with inflation rates nearing 35% and a weakened naira.
Public and Stakeholder Reactions
The announcement has elicited mixed reactions. Consumer groups, such as the All Electricity Consumers Forum, have condemned the plan, calling it "insensitive" at a time when stable electricity remains elusive for many Nigerians. National Coordinator Adeola Samuel-Ilori questioned the logic behind a tariff hike, arguing that the dilapidated state of distribution and transmission infrastructure undermines any justification for higher charges. "The present infrastructure of the DisCos and the Transmission Company of Nigeria is moribund," he told local media. "How can they expect the masses to pay more when they haven’t delivered on their promises?"
Small-scale industrialists have echoed these sentiments. Segun Kuti-George, National Vice President of the Nigerian Association of Small-Scale Industrialists, accused the government of being disconnected from the economic realities facing citizens. "The government is behaving as if they are ruling from outside," he lamented, pointing to recent tariff increases by telecom operators and the Nigerian Ports Authority as compounding the financial pressure on Nigerians.
On social media platforms like X, Nigerians have expressed frustration and skepticism. One user warned Band B and C customers to "prepare for a hike," while another criticized the government’s track record, noting that a previous tariff increase for Band A failed to deliver the promised 20 hours of daily supply. "This same deceptive government is now proposing tariff hikes for Band B and C households. Lol," the user remarked.
Government’s Defense and Next Steps
The Federal Government has framed the tariff review as a necessary step to ensure the sustainability of the power sector. Adelabu emphasized that continuous improvements to distribution and transmission infrastructure would eventually allow more consumers to transition to Band A, benefiting from longer hours of supply. He also highlighted the government’s Meter Acquisition Fund (MAF) programme, launched under the Presidential Metering Initiative (PMI), which aims to provide free meters to Band A subscribers as part of ongoing reforms.
However, critics argue that without addressing fundamental supply issues—such as inadequate generation capacity and DisCo inefficiencies—tariff hikes alone will not yield meaningful improvements. The government’s plan to restructure the tariff bands remains in the proposal stage, with further details expected in the coming weeks. Negotiations with stakeholders, including DisCos, NERC, and consumer representatives, will likely shape the final decision.
Broader Context
This development follows a series of economic reforms under President Bola Tinubu’s administration, including the removal of fuel subsidies, power tariff adjustments, and a 35% telecom tariff hike agreed upon with the Nigeria Labour Congress (NLC) earlier this month. These measures, while aimed at stabilizing the economy, have intensified financial strain on Nigerians, prompting calls for relief measures and greater accountability.
As the Federal Government moves forward with its tariff regularization plan, the focus will remain on balancing sector liquidity with affordability for consumers. For now, Band B and C customers brace for potential changes, while the nation watches to see if the promised investments and improvements in power supply will materialize.