The Minister of Power, Joseph Tegbe, has declared that the Federal Government can no longer continue covering electricity tariff shortfalls while also being expected to deliver power to every Nigerian.
Tegbe made the statement on Friday at the Harvard Business School Association of Nigeria (HBSAN) Energy Conference in Lagos, where stakeholders examined the country’s persistent energy challenges and reform options.
He said the existing market structure, particularly the role of the Nigerian Bulk Electricity Trading Plc (NBET), had become unsustainable. NBET buys electricity in bulk from generation companies and sells it to distribution companies, with the government routinely bridging the gap between cost-reflective prices and what consumers actually pay.
“NBET as a government entity today buys bulk, sells bulk. Because it’s the government, people take advantage,” Tegbe said. “Now, NBET ought to have been sunset about five years ago, and I’m telling you my own plan, at the end of the day, is to move from that model. That model will not help Nigeria. We can’t keep covering tariff shortfalls and think we’ll give power to every Nigerian.”
The minister emphasised that commercially viable pricing only works when suppliers can actually collect payments. “There’s no sense in commercially viable pricing if you don’t collect money,” he stated.
Tegbe said the government is reviewing the electricity market structure and tariff assumptions in conjunction with the Nigerian Electricity Regulatory Commission (NERC). The preferred path, he explained, is a shift to bilateral electricity agreements under which power producers supply distribution companies or customers based on agreed commercial terms and actual payment.
He noted that some bilateral arrangements are already functioning. “All we need to do is move to bilateral agreements. And we already have bilateral agreements working. Mainstream is supplying the Abuja and Ikeja DisCos, and they pay, because Mainstream will supply you what you pay for.”
The minister highlighted deep structural problems at the distribution end of the value chain. Nigeria currently has a metering gap of about 40 per cent. In the past six months the government has deployed over 700,000 meters, with a target of installing 7.5 million meters over the next two to three years.
Aggregate technical, commercial and collection (ATC&C) losses exceed 44 per cent, leaving the sector unable to recover enough revenue from electricity supplied to consumers. These losses, Tegbe said, have contributed to the accumulated debt owed to generation companies, estimated at about ₦3.3 trillion.
The government has already raised and applied roughly ₦1.2–1.3 trillion through a bond programme toward clearing part of the backlog and aims to complete payments by next year. The longer-term goal, he stressed, is to prevent new debts from accumulating.
Tegbe also flagged unauthorised offtake of electricity. He said some companies connected directly to the national grid were taking as much as 150 megawatts daily outside formal arrangements. “We’re going after those companies. We’re going to baptise those companies. And when we are going to baptise those companies, we’re going to put them on the grid.”
Additional measures under consideration include independent transmission lines to link underutilised power plants—particularly in the Niger Delta, where plants with a combined capacity of about 3,000 MW currently generate only around 400 MW—to industrial clusters with high demand. The ministry is also conducting technical audits of transmission infrastructure and prioritising investments in high-demand corridors.
Independent data from NERC cited in related reports show the scale of the subsidy burden: government electricity subsidy obligations rose from about ₦650 billion in 2023 to roughly ₦1.94 trillion in 2024 and remained near ₦1.93 trillion in 2025. Actual releases have lagged far behind budgeted amounts, leaving large unpaid liabilities that cascade through the value chain to generation companies and gas suppliers.
While Tegbe has previously ruled out any immediate increase in electricity tariffs, his latest remarks signal a clear policy direction: the government intends to end the practice of indefinitely financing tariff shortfalls and instead restructure the market so that supply is more tightly linked to payment discipline and commercial viability.
Industry participants at the conference, including energy experts and petroleum regulators, underscored that resolving gas-to-power payment issues and strengthening collection efficiency remain critical to any lasting solution.
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