The Federal Government spent N1.93tn on electricity tariff subsidies in 2025, according to the Nigerian Electricity Regulatory Commission.
NERC disclosed this in its 2025 industry report, stating that the government’s gross tariff subsidy obligation stood at N1.928tn during the year.
The amount represented 57.44 per cent of the total invoice issued by the Nigerian Bulk Electricity Trading Plc, translating to an average subsidy obligation of about N160.69bn per month.
The commission said the subsidy obligation stood at N536.40bn in the first quarter, N514.36bn in the second quarter, N458.76bn in the third quarter and N418.79bn in the fourth quarter.
The 2025 figure represented a marginal decline from the N1.949tn recorded in 2024, despite the Federal Government’s decision to maintain customer electricity tariffs at rates approved in July 2024.
NERC attributed the gradual decline in the subsidy obligation to lower energy off-take by electricity distribution companies compared with previous quarters.
The commission also linked the reduction to a rise in the proportion of electricity supplied to customers on the higher-service Band A category.
According to the report, the share of electricity allocated to Band A and Band B customers increased from 40 per cent to 45 per cent in the fourth quarter of 2025.
“Due to the absence of cost-reflective tariffs across all DisCos, the Government incurred a subsidy obligation of N1,928.31 billion,” NERC stated.
The commission explained that the subsidy was largely driven by the government’s policy of keeping customer tariffs below cost-reflective levels despite increases in the actual cost of supplying electricity.
The continued subsidy means the Federal Government bears a significant portion of the difference between the cost of electricity supply and the amount paid by consumers through regulated tariffs.
