FG incurs N418bn power subsidy

By Mather Godwin 

The Federal Government incurred a subsidy obligation of N418.79 billion in the fourth quarter of 2025, Q4’25 according to   data from the Nigerian Electricity Regulatory Commission, NERC).

The electricity market regulator in its Q4’25 Quarterly report, noted that total amount invoiced by the GenCos for energy delivered to each DisCo and the Differential Remittance Obligation- DRO-adjusted Nigerian Bulk Electricity Trading Plc (NBET) invoice to the respective DisCos during 2025/Q4, represented a N39.96 billion (-8.71%) reduction in subsidy compared to N458.75 billion in Q3’25.  

Government subsidy accounted for 52.30% of the total GenCo invoice, which is a 6.60 percentage point decrease compared to Q3’25, when the subsidy accounted for 58.63% of the total GenCo invoice.

NERC noted that the reduction in subsidy payment was due to the increase in energy allocated to Band A customers from 40% to 45%, reflecting the strategic direction of the government to improve the quality of supply to consumers.

In Q4’25, the DRO-adjusted invoice from NBET to the DisCos was N386.13 billion, while the total remittance made was N359.27 billion, which translates to 93.04% remittance performance.

Comparatively, in Q3’25, the DRO-adjusted invoice from NBET to DisCos was N323.7 billion, and the total remittance was N308.25 billion, which translated to 95.23% remittance performance.

“In the absence of cost-reflective tariffs, the Government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff subsidies.”

Disaggregated remittance performance of the DisCos to NBET in Q4’25 shows that all DisCos except Yola (99.42%), Benin (98.30%), Ibadan (95.58%), Kano (75.14%)25, Jos (49.80%), and Kaduna (40.73%) achieved 100% remittance performance.

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