Federal Government spends N418 billion on electricity subsidies

The Federal Government's subsidy obligation stood at N418.79 billion in the fourth quarter of 2025, as revealed by data from the Nigerian Electricity Regulatory Commission, NERC.

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This figure represents a decline of N39.96 billion, or 8.71%, from the N458.75 billion recorded in the third quarter of 2025, according to NERC's Q4'25 Quarterly report.

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The total amount invoiced by the GenCos for energy delivered to each DisCo, as well as the DRO-adjusted NBET invoice, showed that government subsidy accounted for 52.30% of the total GenCo invoice.

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This percentage indicates a 6.60 percentage point decrease from the 58.63% recorded in the third quarter of 2025, when subsidy accounted for a larger portion of the total GenCo invoice.

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NERC attributed the reduction in subsidy payment to the government's strategic move to boost energy allocation to Band A customers from 40% to 45%, aimed at enhancing supply quality for consumers.

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In the fourth quarter of 2025, the DRO-adjusted invoice from NBET to the DisCos totaled N386.13 billion, while the total remittance made was N359.27 billion, resulting in a 93.04% remittance performance.

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In comparison, the third quarter of 2025 saw a DRO-adjusted invoice of N323.7 billion from NBET to DisCos, with a total remittance of N308.25 billion, translating to a 95.23% remittance performance.

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According to NERC, the government covers the gap between cost-reflective and allowed tariffs in the form of tariff subsidies, as stated in the report.

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The remittance performance of DisCos to NBET in the fourth quarter of 2025 showed that all DisCos, except for Yola, Benin, Ibadan, Kano, Jos, and Kaduna, achieved a 100% remittance performance, with the aforementioned DisCos recording 99.42%, 98.30%, 95.58%, 75.14%, 49.80%, and 40.73% respectively.