Power Minister Hints Of Tariff Increase, Drastic Measures Against DisCos Soon

Minister of power, Adebayo Adelabu, has dropped hints of federal government taking stiff measures against Distribution Companies (DisCos) and increase in electricity tariff soon.

While speaking at a two-day retreat organized by the Senate Committee on Power, Adelabu said: “We need to get tough with the DisCos, as they can easily frustrate all the gains we have made. They have disappointed us in performance expectations. Whatever we do in generation does not mean anything to consumers if it is frustrated at the distribution points”.

He noted that “in 2003 restructuring of the sector, the DisCos were supposed to have technical partners, but a lot of them showed partnership with foreign companies for that purpose which lasted for about three months, immediately they took over, those companies left. So we need utility companies that can invest in the sector to improve infrastructure, improve service”, adding that, “a lot of them went to the banks to take loans to buy the assets, after taking over, instead of providing infrastructure they are taking out the money to pay the loans”.

According to the Minister, despite tariff adjustments that boosted market liquidity by 70 percent—raising sector revenue from ₦1 trillion in 2023 to ₦1.7 trillion in 2024—the distribution segment remains the weakest link.

“In the fourth quarter of 2024, DisCos in the North remitted just ₦124.4 billion (30 percent) of their ₦408.86 billion invoice, with Abuja DisCo accounting for 85 percent of Northern payments. Southern DisCos fared slightly better, remitting ₦254.6 billion (67 percent), though 70 percent of this came from Lagos DisCos alone. These discrepancies are due largely to crumbling infrastructure outside economic hubs, where underinvestment has left networks dilapidated”.

In a statement by the Minister’s Special Adviser, Strategic Communication and Media Relations,
Bolaji Tunji, Adelabu stressed that maintaining the current electricity tariff has become “unsustainable” .

He further affirmed that power sector also faces a ₦4 trillion subsidy backlog owed to generation companies, including ₦1.94 trillion for 2024 alone. With monthly subsidy shortfalls now hitting ₦200 billion, the Minister warned that maintaining current tariffs is “unsustainable,” straining public funds needed for infrastructure upgrades.

“To salvage the sector, we will soon embark on restructuring underperforming DisCos and tightening enforcement of performance benchmarks.

“However, without urgent capital injection into distribution networks, gains in generation—including a historic 6,003MW output in March 2025—and transmission upgrades, such as 61 new transformers deployed in 2024, will fail to translate to reliable household supply”.