The Nigerian Electricity Regulatory Commission (NERC) has reported that the Federal Government incurred a gross electricity tariff subsidy obligation of N1.93 trillion in 2025, covering the shortfall between cost-reflective tariffs and the rates paid by customers. The commission said the amount represented 57.44% of the Nigerian Bulk Electricity Trading invoice, averaging N160.69 billion monthly.
According to NERC’s 2025 industry report, the subsidy stood at N536.40 billion in the first quarter, N514.36 billion in the second, N458.76 billion in the third and N418.79 billion in the fourth quarter. Although the figure was slightly lower than the N1.95 trillion recorded in 2024, NERC attributed the decline to reduced electricity off-take by DisCos and a rise in energy allocation to Band A customers, whose share alongside Band B increased to 45% in the 4th quarter.
The regulator said the subsidy largely resulted from the government’s decision to maintain customer tariffs at the July 2024 approved rates despite rising cost-reflective tariffs across the distribution companies.
