Power Minister Joseph Tegbe told reporters on October 12, 2026 that the Federal Government can no longer continue to finance the shortfall between electricity generation costs and consumer tariffs, and that a new trading framework is being explored to improve market sustainability.
**Why is the subsidy model unsustainable?**
The minister explained that the current arrangement, in which the government absorbs the financial burden of electricity subsidies, is no longer viable. He pointed to chronic poor revenue collection, insufficient metering and large arrears owed to generation companies as key contributors to the fiscal strain.
**What new trading structure is being considered?**
Tegbe disclosed that authorities are evaluating a move away from the [Nigerian Bulk Electricity Trading (NBET)](https://www.nbet.gov.ng/) system toward bilateral electricity agreements. Under such contracts, power producers and purchasers would negotiate commercial terms directly, a change he said should "strengthen payment discipline and improve the financial sustainability of the electricity market."
**How extensive is the metering gap?**
He noted that roughly 40% of electricity consumers in Nigeria lack functional meters. While more than 700,000 meters have been installed in the past six months, the government aims to roll out 7.5 million meters over the next two to three years.
**What does this mean for consumers?**
If adopted, the bilateral model could lead to more transparent pricing and reduced reliance on government subsidies, potentially encouraging better payment behaviour and attracting private investment into the power sector.
The minister’s remarks underscore mounting pressure on the [Federal Government](https://www.gov.ng/) to reform the electricity market and address long‑standing financial challenges.