The Nigerian government paid ₦418.79 billion in electricity subsidies in the fourth quarter of 2025, according to the latest data from the Nigerian Electricity Regulatory Commission (NERC). This figure represents an 8.71% drop from the ₦458.75 billion paid in the previous quarter.
NERC said the reduction was driven by an increase in electricity allocated to Band A customers—from 40% to 45%—in line with government efforts to improve supply quality for higher-paying consumers. Band A customers are meant to receive more stable power under Nigeria’s tariff structure.
The subsidy covered 52.30% of the total generation company (GenCo) invoice in Q4, down 6.60 percentage points from 58.63% in Q3. The subsidy is applied to the difference between cost-reflective tariffs and the allowed tariffs that distribution companies (DisCos) are permitted to charge, with the government covering the shortfall.
NERC said the subsidy is applied at source, reducing the amount DisCos must remit to the Nigerian Bulk Electricity Trading Plc (NBET). In Q4, the DRO-adjusted invoice from NBET to DisCos was ₦386.13 billion, with total remittances reaching ₦359.27 billion—a 93.04% remittance performance. This compares to a 95.23% performance in Q3.
Remittance performance varied among DisCos. Benin and Kaduna improved their remittance rates, while Kano, Jos, Ibadan, and Yola saw declines. Abuja, Eko, Enugu, Ikeja, and Port Harcourt maintained full remittance in both quarters.
NERC stressed that without cost-reflective tariffs, the subsidy mechanism remains essential to sustaining electricity supply across Nigeria’s power sector.
