Lamu Audu, Managing Director of Mainstream Energy Solutions Limited, emphasized the need for targeted electricity subsidies to protect vulnerable Nigerians and reduce market distortions in the power sector. Speaking at the 5th Annual Conference of the Power Correspondents Association (PCAN) in Abuja, Audu advocated for a balanced approach to electricity pricing that considers both cost‑reflective tariffs and energy affordability. The conference, themed “Cost‑Reflective Tariff vs. Energy Poverty: Finding a Pricing Balance in the Nigerian Power Sector,” brought together stakeholders to discuss the challenges of reconciling economic sustainability with public welfare.
Represented by NISO’s Managing Director Abdu Mohammed, Audu noted that blanket subsidies currently distort market signals and sustain inefficiency in the power sector. To address this, he proposed targeted subsidy mechanisms—such as lifeline tariffs and data‑driven welfare‑linked rebates—to protect low‑income households while allowing the market to function efficiently. He stressed the need for thoughtful, multidimensional strategies that combine economic realism with social equity.
Achieving a balance between cost‑reflective tariffs and energy affordability, Audu explained, requires a gradual, transparent, and service‑improvement‑based approach. Consumers are more willing to pay for electricity when they experience reliability and fairness. Service‑based tariffs, coupled with transparent communication and performance‑linked adjustments, can foster trust between consumers and utilities.
PCAN Chairman Obas Esiedesa highlighted the pressing challenge of creating a fair, transparent, and socially responsible pricing framework that balances economic sustainability with public welfare. While cost‑reflective tariffs are necessary for the viability of operators, millions of Nigerians lack access to electricity or rely on expensive self‑generation. The conference served as a platform for stakeholders to discuss how to find a pricing balance in the Nigerian power sector.
As the sector continues to evolve, a balanced approach to electricity pricing remains essential. By adopting targeted subsidies and implementing cost‑reflective tariffs in a gradual and transparent manner, Nigeria can move toward a more sustainable and equitable energy sector.
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