By Eteteonline
The Federal Government incurred N1.98 trillion in electricity subsidy commitments over 12 months, from October 2024 to September 2025, as it struggled to settle the nearly N4 trillion debt owed to power-producing corporations.
According to the Nigerian Energy Regulatory Commission’s most recent report, the federal government covered the difference between authorized tariffs and the real cost of energy supply between October 2024 and September 2025.
The subsidy load was N471 bn in the fourth quarter of 2024, increased to N536.4 billion in the first quarter of 2025, decreased to N458.75 billion in the third quarter, and then eased somewhat to N514.35 billion in the second quarter, for a total of N1.98 trillion for the period.
According to the most recent NERC report, released on Tuesday, the majority of customer groups’ electricity rates remained below cost-reflective levels, so the subsidy was still required. The Band A tariff adjustment, which eliminated subsidies for users consuming at least 20 hours of electricity per day, was implemented in April 2024. Still, the regulator noted that the burden remained significant.
“DisCos are expected to remit 100 % of the invoices received from MO for transmission and administrative service costs.” It disclosed that the subsidy obligation in Q3 amounted to N458.75 billion
“Due to the absence of cost-reflective tariffs across all Discos, the government incurred a subsidy obligation of N458.75; this represents a N55.59 billion reduction in FGN subsidy compared to 2025/Q2 (514.35bn),” it said.
According to NERC, the government uses tariff subsidies applied at the source, primarily through energy distribution companies’ payment responsibilities to the Nigerian Bulk Energy Trading Plc, to cover the difference between permitted tariffs and the cost of delivery.
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