Two years after the introduction of Band A classification, which raised electricity tariffs by over 300 percent and generated N2.4 trillion in revenue to supplement capital market funding, Nigerians continue to lament deteriorating power supply. This comes amid concerns over a fresh tariff hike in Lagos, which is leading a push by sub-national entities to create independent pricing regimes and commercial frameworks under the Electricity Act. Lagos opposes the subsidy regime, arguing that electricity should be treated as a pure economic service.
Tariff Increases and Revenue Inflows
The new regimes could see consumers paying 100 percent of electricity costs, an idea tested with the Band A framework. Data from the Nigerian Electricity Regulatory Commission (NERC) shows that Nigerians have paid an additional N1 trillion annually in electricity tariffs since the multi-year tariff order (MYTO) introduced a service-based, cost-reflective tariff of over N230 per kilowatt-hour. The total additional revenue over the past two years amounts to N2 trillion. An additional N501 billion was raised earlier this year from the capital market to improve power efficiency.
Generation and Distribution Stagnation
While NERC has increased the number of Nigerians on Band A by over 60 percent in the last two years, data from the Nigerian Independent System Operator (NISO) shows that average electricity generation hovers around 4,200 megawatts, while the 11 distribution companies (DisCos) and state utility companies ration about 3,618 MW. This indicates that consumers are forced to pay more while capacity to meet demand stagnates, leading to paying more for less. The latest grid data shows total allocation to DisCos at 3,618 MW, with Abuja DisCo receiving the highest at 634 MW, followed by Ikeja DisCo at 627 MW and Eko DisCo at 535 MW. Ibadan DisCo received 396 MW, while Benin and Enugu DisCos got 268 MW and 257 MW respectively. In the north, Kaduna, Kano, and Jos DisCos received 209 MW, 224 MW, and 187 MW, highlighting regional disparities. Port Harcourt DisCo got 231 MW, while Yola DisCo had the lowest at 50 MW.
Lagos State's Push for Commercial Pricing
Amid an efficiency crisis, the Lagos government is issuing new licenses to investors under the Electricity Act, hinting at a possible tariff increase, unlike the subsidized federal model. Six years ago, NERC introduced the service-based tariff (SBT), classifying consumers into bands A to E. Two years ago, Band A feeders, promised a minimum of 20 hours of daily electricity, were removed from subsidies and charged full cost recovery, raising tariffs from about N68/kWh to over N200/kWh. However, market reports from Lagos, Abuja, Ibadan, Osogbo, and Ede indicate that while tariffs remain high, output in many Band A areas frequently falls below the minimum threshold, raising concerns about weak regulation and underperforming feeder categorization. Stakeholders describe this as a widening electricity inequality system where Nigerians are charged for undelivered services.
Consumer Complaints and Regulatory Failures
In Osogbo and Ede, consumers told The Guardian that the guaranteed 20-hour supply exists mostly on paper. Residents complain of outages lasting several hours daily despite premium rates. Adeyemi Aderemi, a resident in Osogbo, said supply fluctuates heavily: “We were told Band A meant almost constant light, but now we barely get 10 to 12 hours some days.” Another resident in Ede said subscribers “pay more for disappointment.” The Lagos State Electricity Regulatory Commission (LASERC), in its 2025 report, confirmed that Excel Distribution Limited achieved only 33.8 percent compliance for Band A, while IE Energy Lagos recorded just 20 percent, meaning over half of Band A consumers are billed at premium rates without receiving minimum service levels. The report also highlighted infrastructure gaps, with IE Energy Lagos recording 552 overloaded transformers compared to 189 for Excel Distribution.
Government Response and Future Plans
Lagos State Commissioner for Energy and Mineral Resources, Biodun Ogunleye, acknowledged unreliable operational data as a major challenge and said the state is deploying technology to independently monitor feeder performance. He signaled plans to phase out the tariff banding system, aiming for near 24/7 supply in Lagos, but this may come with higher tariffs as the state moves toward a subsidy-free market. “There is no subsidy in Lagos,” he said, aligning with Governor Babajide Sanwo-Olu’s directive. The state is engaging federal authorities for competitive gas pricing to reduce the overall subsidy burden.
Widespread Consumer Frustration
Residents across Nigeria report worsening supply and rising tariffs. In Abuja’s Peace Community Estate, prolonged outages, low voltage, and failing infrastructure are common. In Citizen Avenue, residents were asked to contribute N100,000 each for a new transformer. A resident, Stephen Aduroja, accused regulators of failing to protect consumers. In Port Harcourt, a school operator saw bills surge from N300,000 to N1.6 million after migrating to Band A. In Abuja’s Sun City Estate, residents receive only four to six hours of power daily, far below the promised 18–22 hours, with some spending up to N70,000 weekly on generator fuel.
Consumer Advocacy and Industry Response
National Coordinator of the All Electricity Consumers Protection Forum, Adeola Samuel-Ilori, argued that Band A was designed to strengthen DisCos financially, not improve service. “It was intentionally designed to help DisCos recover money never invested in the sector,” he said. He accused regulators of failing to enforce feeder downgrades and compensation provisions, weakening public confidence in the SBT framework. The Executive Director of Research and Advocacy at the Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan, blamed gas shortages and generation constraints for underperformance. He acknowledged that customers should be downgraded when supply consistently falls below thresholds.
Expert Opinions
Petroleum economist Prof. Wumi Iledare warned that without urgent reforms, the system could collapse. Energy economist Prof. Adeola Adinikinju called for an investigation into past investments, noting that huge funds have been borrowed with little result, urging exploration of alternative pathways.
