Power Supply Stagnates Despite Premium Tariff Hikes
Nigerians are paying 300 per cent more for electricity while receiving the same dismal service. Two years after the government introduced Band A tariffs to boost revenue, the power grid remains stuck. Data from the Independent System Operator shows average generation hovers around 4,200 megawatts. Distribution companies ration even less, sharing just 3,618 megawatts among 200 million people. Consumers now pay a premium for a promise of 20 hours of light that rarely arrives.
The financial windfall for the sector has been immense but invisible. Regulatory figures show Nigerians paid an extra N1 trillion in tariffs annually since the price hike. Another N501 billion came from the capital market to fix efficiency gaps. Yet, the lights stay off. In commercial hubs like Lagos and Abuja, the gap between promised hours and actual supply is widening. Some “premium” areas in Abuja report as little as four hours of power daily.
Lagos State is now moving to bypass federal subsidies entirely. The state aims to treat electricity as a pure economic service with no price caps. It has started issuing new licences to private investors under the Electricity Act. This shift signals a future of even higher prices for Lagosians. State officials argue that a subsidy-free market is the only way to attract real investment. They plan to phase out the current banding system in favour of a 24-hour goal.
Regulatory oversight appears to be failing the public. The Lagos State Electricity Regulatory Commission admits that compliance is shockingly low. One major firm achieved only 20 per cent of its service targets for Band A customers. Despite this, these customers still pay the full, unsubsidised rate. Regulators have the power to downgrade failing feeders and force lower bills. They simply refuse to do so, citing “generation shortfalls” as a permanent excuse for the utilities.
The infrastructure on the ground is rotting away. Residents in Dawaki, Abuja, report leaking transformer oil and sagging power lines. In some estates, the utility companies ask residents to buy their own transformers. This “pay-twice” model forces citizens to fund capital equipment and then pay premium tariffs for the power it carries. Many families now spend N70,000 weekly on generator fuel just to survive. The tariff hike has become a tax on frustration rather than a tool for growth.
Industry insiders blame a chronic shortage of gas and old payment disputes. They argue that distribution firms cannot share what the grid does not produce. But critics see a deeper design. Some consumer advocates claim the Band A model exists only to keep bankrupt utilities afloat. It allows firms to recover money they never actually invested in the system. Unless the government fixes the supply of gas and the state of the wires, Nigerians will keep paying for darkness.