Electricity Act: FG Approves Tariff Relief for Poor Nigerians and Vulnerable Groups

The Federal Government has announced tariff relief measures for poor Nigerians and other vulnerable groups under the implementation of the Electricity Act, signaling a renewed push to balance cost-reflective tariffs with social protection. The move comes amid rising concerns about the burden of electricity costs on households and small businesses, especially at a time when inflation and economic pressures are eroding disposable incomes.

The new directive, made public by the Nigerian Electricity Regulatory Commission (NERC), provides that specific categories of electricity consumers will benefit from targeted subsidies and tariff relief to cushion the impact of ongoing reforms in the power sector. Under the framework, households classified under “lifeline consumers” — those who use less than 50 kilowatt-hours of electricity monthly — as well as low-income earners, will enjoy reduced tariffs or government-backed subsidies.

According to NERC, the Electricity Act mandates equitable access to power and emphasizes affordability for disadvantaged groups. The Commission said the relief is part of a broader reform agenda designed to align electricity pricing with cost realities while ensuring that no Nigerian is left behind in the transition toward sustainable power sector financing. The measure also includes provisions for rural communities, micro-businesses, and schools, many of whom struggle to cope with rising operational expenses due to high utility bills.

Industry observers note that the relief initiative is a response to widespread public discontent over recent tariff hikes, which saw Band A customers paying significantly higher rates for guaranteed supply. While regulators argued that the hike was necessary to attract investment and sustain distribution companies, critics insisted it disproportionately affected the poor and small-scale enterprises. By offering tariff relief, the government hopes to strike a balance between investor confidence and social protection.

Speaking on the development, a senior official of NERC stressed that the relief does not mean a blanket subsidy but a targeted approach to ensure the most vulnerable are protected. “The objective is to create a fair and just electricity market that delivers service while safeguarding the poor. The relief measures will be implemented transparently, with clear criteria for eligibility,” the official stated.

Stakeholders across the country have welcomed the development, though some have urged government to ensure proper monitoring and prevent abuse. The Manufacturers Association of Nigeria (MAN) noted that while large-scale industries are not direct beneficiaries, protecting low-income consumers is critical for sustaining demand and preventing social unrest. Similarly, consumer advocacy groups emphasized the need for a comprehensive database to ensure that only genuinely vulnerable Nigerians benefit.

Experts, however, caution that tariff relief must not undermine the financial sustainability of the sector. Nigeria’s electricity industry has long struggled with liquidity challenges, with distribution companies (DisCos) frequently unable to remit revenues to generation and transmission companies. This has led to heavy debts, government bailouts, and stalled investments. Analysts say the government must ensure that relief measures are adequately funded through budgetary allocations or special intervention funds to avoid creating new deficits.

The Electricity Act, signed into law in 2023, decentralizes power generation, distribution, and regulation, giving states greater autonomy to manage electricity within their jurisdictions. It also provides for renewable energy integration, consumer protection, and mechanisms to attract private sector investments. Tariff relief for poor Nigerians is therefore seen as part of the Act’s consumer-centered reforms.

Power sector unions have also reacted cautiously to the development. The National Union of Electricity Employees (NUEE) said while the relief is commendable, the government must urgently address structural issues such as poor transmission capacity, metering gaps, and energy theft. Without tackling these, the union warned, tariff relief may only serve as a temporary palliative rather than a lasting solution.

The announcement comes as Nigeria intensifies efforts to improve electricity supply and reduce reliance on expensive alternative power sources like diesel generators. Reliable and affordable electricity has been identified as a key driver for industrialisation, job creation, and poverty reduction.

Looking ahead, the federal government has promised to regularly review the tariff relief program and expand its coverage if necessary. Officials also disclosed plans to collaborate with state governments to implement complementary support schemes, particularly in rural communities where electricity access remains limited.

For millions of Nigerians struggling with the high cost of living, the tariff relief measures represent a much-needed reprieve. However, experts stress that long-term success will depend on a delicate balance between protecting the poor and ensuring the financial health of the power sector. If effectively implemented, the Electricity Act could mark a turning point in Nigeria’s quest for reliable, affordable, and inclusive electricity supply.