FG Spends N418.79bn on Power Subsidy in Q4 2025 — Nigerian Electricity Regulatory Commission
Story: Written by springnewsng April 14,2026 The Federal Government expended N418.79 billion on electricity subsidies in the fourth quarter of 2025, according to the latest report by the Nigerian Electricity Regulatory Commission (NERC).
The figure represents a decline from the N458.75 billion recorded in Q3 2025, indicating a reduction of N39.96 billion in subsidy spending within the period under review.
According to the regulator’s report, subsidies accounted for 52.30 percent of the total invoiced amount by power generation companies (GenCos), down from 58.63 percent in the previous quarter.
NERC attributed the drop in subsidy costs to improved electricity supply to Band A customers, whose energy allocation increased from 40 percent to 45 percent. The adjustment forms part of ongoing efforts to enhance power supply reliability for high-paying consumers.
Explaining the subsidy framework, the commission noted that in the absence of cost-reflective tariffs, the government bridges the funding gap through tariff support. This subsidy is applied specifically to the generation cost payable by distribution companies (DisCos) to the Nigerian Bulk Electricity Trading (NBET), structured as a DisCo’s Remittance Obligation (DRO).
Within the quarter, NBET issued a total adjusted invoice of N386.13 billion to DisCos, out of which N359.27 billion was paid, translating to a remittance rate of 93.04 percent. This marks a slight drop from the 95.23 percent recorded in Q3 2025.
Performance across distribution companies was largely positive, with several DisCos meeting their full payment obligations. However, Yola, Benin, Ibadan, Kano, Jos, and Kaduna DisCos fell short of 100 percent remittance, with Kaduna and Jos posting the weakest performance levels.
While Benin and Kaduna DisCos showed improvement compared to the previous quarter, others—including Kano, Jos, Ibadan, and Yola—recorded declines. Meanwhile, Abuja, Eko, Enugu, Ikeja, and Port Harcourt DisCos maintained a consistent 100 percent remittance rate across both quarters.
The report underscores ongoing challenges within Nigeria’s electricity market, even as efforts continue to balance cost recovery with consumer affordability.
