In the fourth quarter of 2025, the Nigerian government disbursed ₦418.79 billion in electricity subsidies, as reported by the Nigerian Electricity Regulatory Commission (NERC). This amount marks an 8.71% decrease from the ₦458.75 billion allocated in the previous quarter. NERC attributed this reduction to an increase in electricity allocation for Band A customers, which rose from 40% to 45%. This adjustment aligns with government initiatives aimed at enhancing the quality of supply for higher-paying consumers. Under Nigeria’s tariff structure, Band A customers are expected to receive more stable power.
The subsidy in Q4 covered 52.30% of the total invoice from generation companies (GenCos), reflecting a decline of 6.60 percentage points from the 58.63% coverage in Q3. The subsidy is designed to bridge the gap between cost-reflective tariffs and the tariffs that distribution companies (DisCos) are allowed to charge, with the government assuming responsibility for the shortfall. NERC explained that the subsidy is applied at the source, which effectively reduces the amount that DisCos need to remit to the Nigerian Bulk Electricity Trading Plc (NBET).
In Q4, the DRO-adjusted invoice from NBET to DisCos amounted to ₦386.13 billion, with total remittances reaching ₦359.27 billion, resulting in a remittance performance of 93.04%. This figure represents a slight decline compared to the 95.23% performance recorded in Q3. Remittance rates varied among DisCos; while Benin and Kaduna improved their rates, Kano, Jos, Ibadan, and Yola experienced declines. In contrast, Abuja, Eko, Enugu, Ikeja, and Port Harcourt maintained full remittance in both quarters. NERC emphasized that without cost-reflective tariffs, the subsidy mechanism remains crucial for sustaining electricity supply throughout Nigeria’s power sector.
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