Band A, Band B Users in Trouble as FG Plans to Remove Electricity Subsidy
- Nigeria's government ends electricity subsidies, moving to a full cost-reflective tariff for consumers
- Aged power infrastructure requires urgent renewal to ensure a reliable electricity supply
- Decentralisation empowers states to regulate local electricity markets, enhancing private sector participation
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Electricity consumers across Nigeria, especially those classified under Band A and Band B, are about to feel the full impact of what they consume.
The Federal Government has begun the process of migrating the entire power sector to a full cost-reflective tariff (CRF) regime, effectively ending decades of subsidies.
Source: Getty Images
This means households and businesses will soon pay the true cost of electricity generation, transmission, and distribution without government support.
Minister of Power, Chief Adebayo Adelabu, disclosed on Thursday, April 16, 2026, while inaugurating the new board of the Nigerian Electricity Management Services Agency (NEMSA) in Abuja.
He described the move as essential for the long-term survival and sustainability of the power industry.
Ageing infrastructure demands urgent overhaul
Adelabu stressed that Nigeria’s power infrastructure is in dire need of renewal. Much of the equipment in generation, transmission, and distribution is over 60 years old and can no longer support a reliable supply.
“We owe our country a duty to start renewing and revamping these infrastructural tools to levels that can guarantee uninterrupted and functional electricity supply,” the minister said.
He noted that without cost-reflective tariffs, the sector cannot attract the massive private investment required to modernise the network and deliver the 24-hour power supply Nigerians have demanded for decades.
Power sector decentralisation gains momentum
In a major policy shift, the government has empowered sub-national governments to regulate all aspects of electricity within their territories.
Already, 17 states have secured regulatory autonomy, allowing them to license generators, distributors, and even set tariffs locally.
Adelabu revealed that local governments will soon join the fray, further deepening decentralisation.
He highlighted the liberalisation drive under the Electricity Act 2023, which has opened the sector to greater private-sector participation.
“Before, NEPA, PHCN, and TCN were all owned by the federal government,” he said. “Now we have an increased presence of private sector investors.”
NEMSA board tasked with raising standards
While inaugurating the NEMSA board, the minister charged members with modernising the agency to match the rapidly evolving sector.
Their responsibilities include scaling up inspection and certification, strengthening enforcement against substandard electrical materials, and preparing for the surge in off-grid solutions, renewable energy, embedded generation, and interconnected mini-grids.
“The NEMSA that you left behind is no longer the same,” Adelabu told the board. “The sector has transformed. We now have a sector that is governed by the Electricity Act of 2023, which has decentralisation and liberalisation as its focus.”
What this means for Nigerians
For millions of Band A and Band B customers who already enjoy relatively better supply hours, the coming months will bring higher tariffs.
The government hopes the painful but necessary reform will finally break the cycle of underfunding, poor infrastructure, and unreliable power.
Source: Getty Images
Industry watchers say success will depend on how quickly states and private investors respond with new generation capacity and improved service delivery.
The message from Abuja is clear: the era of subsidised electricity is ending. Nigerians will now pay for the power they actually receive, but in return, they are promised a more efficient, sustainable, and ultimately more reliable electricity industry.
FG announces plan to cut electricity subsidy
Legit.ng earlier reported that power generation Companies (GenCos) have criticised the federal government’s announcement that it would stop bearing electricity subsidy costs alone from 2026 and instead share the burden among federal, state, and local governments.
The Managing Director and Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, said claims of government subsidy are not backed by budgetary allocations or official documentation.
As reported by PUNCH, she argued that there is no verifiable evidence of an existing electricity subsidy, stressing that generation companies have been absorbing revenue shortfalls for more than a decade.
Source: Legit.ng
