FG Urged to Remove Electricity Subsidies, Introduce Cost-Reflective Tariffs
- The NDPHC has urged the government to remove electricity subsidies and implement cost-reflective tariffs
- Only about 30% of electricity market invoices are currently settled, creating liquidity challenges
- Gas procurement accounts for nearly 60% of operational costs for thermal power plants
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Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The Managing Director and Chief Executive Officer of the Niger Delta Power Holding Company (NDPHC), Jennifer Adighije, has called on the federal government to phase out electricity subsidies and introduce fully cost-reflective tariffs for all categories of consumers.
Adighije made the recommendation in a statement made available to journalists in Lagos, where she outlined persistent financial and structural challenges affecting Nigeria’s power sector, PUNCH reported.
Source: Getty Images
Call for cost-reflective tariffs
According to her, separating government subsidies from electricity tariffs and gradually implementing cost-reflective pricing across customer segments would help stabilise the electricity market.
She explained that building a financially sustainable market is crucial to restoring investor confidence, encouraging private sector participation and driving long-term growth in the sector.
The NDPHC chief expressed concern over liquidity challenges, revealing that only about 30% of market invoices are currently being settled. This, she said, has created significant financial pressure across the electricity value chain.
She also highlighted gas supply shortages as a major constraint on thermal power generation. Gas procurement, she noted, accounts for nearly 60% of operational costs for generation companies.
Transmission, capacity gaps
Adighije further pointed to the imbalance between installed generation capacity and the transmission network’s ability to evacuate electricity efficiently to distribution companies and end-users.
Providing updates on operations, she disclosed that the NDPHC has built 10 power plants across 10 states under the National Integrated Power Project (NIPP). Eight of the plants have been commissioned, while six are currently in commercial operation.
She stated that the company’s installed generation capacity is about 4,000 megawatts, representing roughly 30% of Nigeria’s total grid-connected capacity.
Over the past year, the company recovered approximately 900 megawatts of previously idle generation capacity through improved plant optimisation, stronger operational discipline and predictive maintenance strategies.
“These improvements demonstrate NDPHC’s commitment to maximising existing assets before embarking on new-generation projects,” she said.
Recovery of equipment and infrastructure plans
Adighije also revealed that the company recently retrieved 110 abandoned containers and 216 packages of critical power equipment valued at millions of dollars from Nigerian ports after prolonged delays.
She said the recovered equipment would be deployed to complete ongoing generation, transmission and distribution projects nationwide, helping to fast-track infrastructure delivery.
Beyond tariff reforms, the NDPHC boss disclosed that the company is diversifying into renewable energy and direct power supply to industrial clusters to improve electricity reliability and support economic growth.
She said the firm is gradually transitioning to cleaner energy sources, including solar and small hydro projects, to complement its existing gas-fired plants developed under the NIPP framework.
According to her, a solar power project is being developed for industrial clusters in Kano State, which will serve as a pilot for similar projects in other industrial hubs across the country.
Under its “Light Up Nigeria” initiative, the company plans to provide reliable and affordable electricity to industrial and commercial clusters, markets, universities and residential communities through embedded and independent power solutions.
Source: Getty Images
Policy implementation key to sector growth
Adighije stressed that consistent implementation of government policies, particularly the provisions of the Electricity Act 2023, is vital to attracting investment, strengthening infrastructure and stimulating electricity demand in the country.
She reaffirmed the NDPHC’s commitment to supporting national development through improved power supply, expressing optimism that ongoing reforms and targeted investments would enhance electricity reliability in the coming years.
DisCos generate more revenues despite poor electricity supply
Legit.ng earlier reported that electricity distribution companies (DisCos) in Nigeria generated a total of N1.13 trillion from customers between April and September 2025, despite widespread complaints over poor electricity supply and frequent power outages across the country.
According to data from the National Electricity Regulatory Commission (NERC), the collection efficiency of the DisCos improved from 76.07% in the second quarter (Q2) to 80.70% in the third quarter (Q3).
This revenue growth occurred despite multiple grid collapses, reduced power generation, and poor power supply.
Source: Legit.ng
