Electricity tariffs in Nigeria may soon rise as power generation companies intensify pressure on the Nigerian Electricity Regulatory Commission to reflect increasing domestic gas prices in current tariff structures.
Industry stakeholders say the move has become inevitable, given the central role gas plays in electricity generation. Gas accounts for more than 70 percent of Nigeria’s power supply, making its pricing a critical factor in determining electricity costs.
The Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, said gas costs are a “pass-through” component that must be captured in electricity pricing.
“Gas pricing is not something you can ignore. It is a pass-through cost, and it must be reflected in tariffs if the sector is to remain viable,” she said.
However, Ogaji emphasized that the sector’s most pressing challenge is not tariffs but poor payment discipline across the value chain.
“The bigger issue is that invoices are not being paid. Whether tariffs go up or not, if payments are not made, the system will continue to struggle,” she added.
She also raised concerns about the lack of “bankable demand,” questioning the number of Nigerians who actually pay for electricity and highlighting weak transparency in revenue collection.
“We need to ask ourselves how much of the electricity consumed is truly paid for. Without transparency and enforcement, the sector cannot grow,” Ogaji warned.
Echoing similar concerns, the Executive Director of PowerUp Nigeria, Adetayo Adegbenle, said rising gas prices would inevitably push tariffs higher and increase subsidy burdens.
“Higher gas costs will naturally translate to higher tariffs or bigger subsidies. Even if tariffs are not immediately reviewed, generation costs and invoices will still go up,” he explained.
Adegbenle called on the government to consider transitioning to a fully deregulated, contract-based electricity market to improve efficiency and sustainability.
Meanwhile, consumer advocate Kunle Olubiyo criticized the current gas pricing framework as opaque, arguing that systemic inefficiencies are a major driver of high electricity costs.
“The problem is not just gas pricing; it’s the inefficiencies in the system. Poor metering, energy losses, and weak infrastructure significantly inflate costs for consumers,” he said.
Olubiyo added that addressing these inefficiencies could help reduce the financial burden on electricity users without necessarily increasing tariffs.
With mounting pressure from Gencos and rising input costs, experts warn that without coordinated reforms in pricing, payment enforcement, and transparency, any tariff adjustment could further strain Nigeria’s already fragile power sector.