The Federal Government has hinted that it would phase out electricity subsidy payments from 2027 in order to address mounting debts in the power sector.

The minister of power, Joseph Tegbe, made this known on Friday, saying the subsidy would be removed gradually and consumers would not lose access to electricity services.

“We have the mandate of Mr President to clear the legacy debt and come up with sustainable structures to make sure this doesn’t pile up any more,” Tegbe said.

“I promise you, next year, by God’s grace, we will put a stop to this so-called subsidy in the power sector. Mr President, we will not deprive Nigeria of anything. We’ll make sure Nigerian consumers continue to have power and improve power services.”

The minister also said there is no immediate plan to increase electricity tariffs.

The removal aligns with recommendations by the International Monetary Fund (IMF) for Nigeria to gradually stop electricity subsidies.

The government has previously put the subsidy burden at about N3 trillion as of February 2024, while the Association of Power Generation Companies says GenCos are owed roughly N6.5 trillion.