FG Spends ₦458.75 Billion On Power Subsidies As DisCos Boost Revenue Collections

According to industry reports, Electricity Distribution Companies (DisCos) in Nigeria achieved notable operational improvements in the third quarter of 2025, with tariff collection efficiency rising to 80.7 per cent, up from 76.07 per cent in the previous quarter. The Nigerian Electricity Regulatory Commission (NERC) revealed that DisCos collected ₦570.21 billion of the ₦706.61 billion billed to electricity consumers between July and September 2025, reflecting steady gains despite challenges posed by tariffs that do not fully cover costs.

NERC reported that total energy offtake by all DisCos during the period amounted to ₦854.53 billion, while billing efficiency rose marginally to 82.69 per cent from 81.61 per cent in Q2. However, cumulative billing losses for the quarter stood at ₦147.92 billion, highlighting persistent inefficiencies in the sector.

Despite the operational improvements, government support remained significant, with the Federal Government disbursing ₦458.75 billion in electricity subsidies during the quarter. This represented 58.63 per cent of total invoices issued by power generation companies, although the figure marked a 10.81 per cent decline from the ₦514.35 billion subsidies recorded in Q2. NERC attributed the continued reliance on subsidies to the absence of fully cost-reflective tariffs and noted that the payments primarily covered the gap between generation costs and approved tariffs.

The report also highlighted weak compliance in international bilateral transactions, with only $7.125 million remitted out of $18.69 million invoiced, a 38.09 per cent remittance rate. Domestic bilateral customers performed better, paying ₦3.19 billion out of ₦3.64 billion billed, achieving an 87.61 per cent remittance rate. Total energy received by DisCos stood at 7,348.95 gigawatt-hours, but only 6,158.54GWh was billed to end-users, resulting in an energy accounting efficiency of 83.80 per cent, up from 82.43 per cent in Q2.

NERC noted that under-recovery across the electricity market remains influenced by customer unwillingness to pay, dissatisfaction with service, and inadequate metering. A breakdown of individual DisCo performance showed Ikeja Electric leading with 100 per cent collection efficiency, followed by Eko (88.74%), Benin (86.44%), and Abuja (81.60%). Kaduna Disco recorded the lowest efficiency at 45.67 per cent. Significant quarter-on-quarter improvements were recorded by Ikeja (+17.58 percentage points), Port Harcourt (+8.83pp), and Yola (+8.72pp), while Kaduna (-2.70pp) and Ibadan (-1.34pp) experienced declines. NERC emphasized that timely settlement of upstream market obligations is crucial to maintaining stable power generation and transmission.