The Federal Government recorded an electricity subsidy of ₦418.79 billion in the fourth quarter of 2025, according to a new report by the Nigerian Electricity Regulatory Commission (NERC).
The figure underscores the ongoing financial strain on the government as it continues to support the power sector amid tariffs that are yet to fully reflect actual production costs.
In its Q4 2025 report, NERC revealed that total invoices from power generation companies, along with the adjusted invoices issued by Nigerian Bulk Electricity Trading Plc (NBET) to electricity distribution companies (DisCos), declined during the period.
The subsidy figure represents a decrease of ₦39.96 billion, or 8.71 per cent, compared to the ₦458.75 billion recorded in the third quarter of 2025. Further analysis showed that the subsidy accounted for 52.30 per cent of the total GenCo invoice in Q4, down from 58.63 per cent in Q3.
NERC attributed the reduction largely to increased electricity supply to higher-paying consumers. Specifically, the share of energy allocated to Band A customers rose from 40 per cent to 45 per cent, helping to ease the subsidy burden.
The development aligns with the Federal Government’s broader strategy to improve electricity supply quality while enhancing cost recovery within the sector.
On remittance performance, the report noted that NBET issued a total invoice of ₦386.13 billion to DisCos in Q4 2025. Out of this amount, the companies remitted ₦359.27 billion, representing a 93.04 per cent remittance rate.
This marks a slight decline compared to the third quarter, when DisCos achieved a 95.23 per cent remittance performance, paying ₦308.25 billion out of ₦323.7 billion billed.
A breakdown of the Q4 figures showed that while several distribution companies met their obligations, others recorded shortfalls. Yola (99.42 per cent), Benin (98.30 per cent), and Ibadan (95.58 per cent) performed strongly, while Kano (75.14 per cent), Jos (49.80 per cent), and Kaduna (40.73 per cent) lagged behind.
Reaffirming the government’s role, NERC stated that in the absence of cost-reflective tariffs, the government continues to bridge the gap between actual electricity costs and approved tariffs through subsidies.
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