The Federal Government is poised to channel approximately N1 trillion in savings from the removal of electricity subsidy to bolster social services and enhancing power supply nationwide.
The announcement was made by the Minister of Information, Mohammed Idris, during a radio program in Kaduna.
Under the new electricity act signed by President Tinubu, the Nigerian Electricity Regulatory Commission (NERC) has been empowered to sanction power distribution companies (Discos) failing to fulfill their contractual obligations.
Minister Idris emphasized that the funds saved from the subsidy withdrawal would be reinvested to improve power supply infrastructure and bolster essential social services like healthcare and education.
Furthermore, the Minister reaffirmed the government’s commitment to post-fuel subsidy interventions, including the cash transfer program for vulnerable Nigerians and the provision of CNG buses, which remain on track.
Regarding the N25,000 cash transfer program, Minister Idris disclosed that a presidential committee tasked with reviewing its operational mechanism has submitted its report, signaling the imminent commencement of the program.
The move comes against the backdrop of recent increases in electricity tariffs, particularly for Band A users receiving a minimum of 20 hours of electricity daily.
The government contends that the new tariffs are more reflective of costs and will predominantly affect 17% of total electricity consumers, who reportedly receive 40% of the nation’s power supply.
Notably, the removal of electricity subsidies for Band A and B users is projected to significantly reduce the government’s electricity subsidy bill by 52% per month, representing a substantial fiscal adjustment.
