Electricity Subsidy bill hits ₦1.92trn in 2025 – NERC

The electricity tariff subsidy obligation of the Federal Government stood at ₦1.92 trillion in 2025 as the government continued to absorb the gap between cost-reflective electricity tariffs and rates paid by customers, according to the Nigerian Electricity Regulatory Commission (NERC).

In its 2025 industry report, NERC placed the government’s gross tariff subsidy obligation at ₦1.928 trillion for the year, representing 57.44 percent of the total Nigerian Bulk Electricity Trading (NBET) invoice. The figure translates to an average monthly subsidy obligation of ₦160.69 billion.

The quarterly breakdown showed that the subsidy obligation stood at ₦536.40 billion in the first quarter, ₦514.36 billion in the second quarter, ₦458.76 billion in the third quarter, and ₦418.79 billion in the fourth quarter.

The 2025 total represented a slight decline from the ₦1.949 trillion recorded in 2024, despite the Federal Government’s directive to freeze customer electricity tariffs at the July 2024 approved rates.

NERC attributed the gradual reduction in quarterly subsidy obligations to reduced energy off-take by electricity distribution companies (DisCos) compared to previous quarters, as well as an increase in the proportion of energy allocated to Band A customers.

The share of energy allocated to Band A customers rose from 40 percent to 45 percent in the fourth quarter of 2025.

“Due to the absence of cost-reflective tariffs across all DisCos, the Government incurred a subsidy obligation of ₦1,928.31 billion,” the commission stated. NERC added that the subsidy burden was largely driven by the government’s policy of keeping customer tariffs frozen despite continuous increases in cost-reflective tariffs.