The Federal Government will no longer bear the sole burden of electricity subsidies.
From 2026, these costs will be shared among federal, state, and local governments.
Director-General of the Budget Office, Tanimu Yakubu, announced this framework on Monday in Abuja.
He addressed a budget workshop for ministries, departments, and agencies.
President Bola Tinubu has directed that all power subsidies be made explicit and tracked.
The administration aims to end hidden liabilities that cause recurring crises in the energy market.
Yakubu explained that a subsidy is a bill created when tariffs are held below cost.
He insisted that if multiple tiers of government benefit from low rates, they must share the bill.
Under this new policy, any government tier choosing affordability interventions must provide the funding.
The goal is to align incentives and support a more efficient power market.
Every level of government now has a stake in ensuring cost-reflective performance.
This shift intends to protect the vulnerable while maintaining a stable electricity supply.
The 2026 Budget also moves away from fragmented project lists toward a "single-train" framework.
Yakubu emphasised that only projects ready for immediate delivery and financing will receive funding.
The President has also ordered a review of fiscal rules to prevent impulsive spending and casual debt.
The target is a budget that functions as a tool for delivery rather than a simple statement of intent.