Federal Government Records ₦418.79 Billion Electricity Subsidy In Q4 – NERC

According to Ireporter Online, the Federal Government incurred a electricity subsidy obligation of ₦418.79 billion in the fourth quarter of 2025, as revealed in the latest report by the Nigerian Electricity Regulatory Commission (NERC). The figure underscores the persistent financial strain on government resources in bridging the gap created by non-cost-reflective electricity tariffs in the country.

The NERC Q4 2025 report showed that the combined invoice from generation companies, along with the Differential Remittance Obligation (DRO)-adjusted invoice issued by the Nigerian Bulk Electricity Trading Plc to distribution companies, experienced a decline during the period under review. Consequently, the subsidy obligation dropped by ₦39.96 billion, representing an 8.71 per cent decrease from the ₦458.75 billion recorded in the previous quarter.

The commission further disclosed that government subsidy accounted for 52.30 per cent of the total GenCo invoice in Q4, reflecting a reduction of 6.60 percentage points compared to 58.63 per cent in Q3. It attributed this decline to improved energy allocation to higher-paying customer bands, particularly Band A users, which increased from 40 per cent to 45 per cent during the period. NERC noted that this shift aligns with ongoing reforms aimed at enhancing cost recovery and improving electricity supply efficiency.

On remittance performance, the report indicated that the DRO-adjusted invoice from NBET to distribution companies stood at ₦386.13 billion, out of which ₦359.27 billion was remitted, translating to a 93.04 per cent remittance rate. This represents a slight decline from the 95.23 per cent recorded in the third quarter.

A breakdown of performance among distribution companies showed varying compliance levels, with Yola, Benin, Ibadan, Kano, Jos, and Kaduna electricity distribution companies recording different levels of shortfalls. Despite this, most DisCos met their remittance obligations in full or near full capacity.

Reaffirming government intervention in the sector, the commission stated that “in the absence of cost-reflective tariffs, the Government undertakes to cover the resultant gap between the cost-reflective and allowed tariff in the form of tariff subsidies.”