Nigeria’s electricity subsidy obligations have surged to N1.98 trillion over the past 12 months, covering the period from October 2024 to September 2025, according to the latest quarterly reports from the Nigerian Electricity Regulatory Commission (NERC). The NERC report, released on Tuesday, shows that the government spent substantial sums on subsidies during the three quarters of 2025: N471.69 billion in the fourth quarter of 2024, N536.4 billion in the first quarter of 2025, N514.35 billion in the second quarter, and N458.75 billion in the third quarter. These expenditures reflect tariffs that remain below cost‑reflective levels, except for Band A consumers, who received a tariff hike in April 2024.
The mounting subsidy burden has reignited calls for a across‑the‑board tariff increase for electricity users. Minister of Power Adebayo Adelabu has warned that the current subsidy model is unsustainable and has advocated for a targeted scheme that supports only low‑income households. The surge in subsidies occurs alongside the federal government’s struggle with N4 trillion in legacy debts owed to generation companies.
To address the liquidity crisis in the Nigerian Electricity Supply Industry (NESI), the government launched a N4 trillion bond in December 2025 to begin repaying these legacy debts, although no official update on investor response has been provided. The growing subsidy obligations have significant implications for the country’s energy sector, underscoring the need for a sustainable solution.
Reforming the electricity sector and ensuring cost‑reflective tariffs are essential steps toward curbing the rising subsidy burden. As Nigeria navigates ongoing challenges in its energy market, monitoring developments and assessing the impact of any reforms on the economy and electricity users will be crucial. The latest NERC reports highlight the urgency of finding a viable solution to the subsidy issue, which will shape the future of Nigeria’s electricity sector.
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