‘Why Nigerians can’t pay higher electricity tariff’

The MD/CEO of the Nigerian Independent System Operator (NISO) Engr. Abdu Bello Mohammed, has stated that rising inflation, unemployment, and declining purchasing power have eroded the capacity of many Nigerians to pay higher electricity tariffs. Speaking during the 5th Annual Conference of the Power Correspondents Association of Nigeria (PCAN), he stated that millions of households […]

The MD/CEO of the Nigerian Independent System Operator (NISO) Engr. Abdu Bello Mohammed, has stated that rising inflation, unemployment, and declining purchasing power have eroded the capacity of many Nigerians to pay higher electricity tariffs.

Speaking during the 5th Annual Conference of the Power Correspondents Association of Nigeria (PCAN), he stated that millions of households in Nigeria still lack access to reliable electricity and for many, connection to the grid does not guarantee supply, and for others, the cost of energy remains beyond reach.

He stressed that energy poverty is not just about a lack of connection but the inability to afford sufficient power for daily life and productive enterprise.

He, however, said without cost-reflective tariffs, power utility companies cannot recover costs as investors cannot commit capital and electricity infrastructure will continue to deteriorate.

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“The real question, therefore, is not whether we should have cost-reflective tariffs, but how to achieve them in a way that preserves affordability and protects the most vulnerable among us.

“Finding that balance requires thoughtful, multidimensional strategies. First, we must embrace targeted subsidy mechanisms that reach the truly vulnerable, rather than blanket subsidies that distort market signals and sustain inefficiency. Properly designed lifeline tariffs and data-driven welfare-linked rebates can provide real protection for low-income consumers while allowing the market to function efficiently,” he said.

On his part, the Chairman, Power Correspondents Association of Nigeria (PCAN), Obas Esiedesa, said more than a decade after the privatization of the power sector, balancing tariff remains a formidable challenge.

“The industry is still weighed down by an estimated N6trb debt owed by the federal government to power generation companies.

“A massive liquidity gap across the value chain, gas supply shortages, aging and weak transmission infrastructure, and rising foreign exchange costs that threaten investments and operations. While operators demand cost-reflective tariffs as a condition for viability, millions of Nigerians continue to live in darkness or rely on expensive self-generation,” he said.