The Federal Government spent N1.93 trillion to subsidise electricity tariffs in 2025, absorbing part of the cost of power supplied to consumers, the Nigerian Electricity Regulatory Commission (NERC) has reported.
According to NERC’s 2025 industry report, the government’s gross tariff subsidy obligation reached N1.928 trillion during the year. The figure accounted for 57.44 per cent of the total invoice issued by the Nigerian Bulk Electricity Trading Company (NBET).
On a monthly basis, the subsidy averaged N160.69 billion.
NERC’s data showed that the subsidy obligation was N536.40 billion in the first quarter, before falling to N514.36 billion in the second quarter. It declined further to N458.76 billion in the third quarter and N418.79 billion in the final quarter.
Despite the decline, the 2025 subsidy bill remained substantial, although it was slightly lower than the N1.949 trillion recorded in 2024.
The reduction came amid the Federal Government’s decision to maintain electricity tariffs at the rates approved in July 2024, even as the cost of supplying electricity increased.
NERC said the lower quarterly subsidy figures were partly linked to reduced electricity purchases by distribution companies (DisCos). It also pointed to the growing proportion of electricity supplied to customers classified under Band A.
The commission reported that the proportion 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,” the commission said.
NERC explained that the subsidy was largely driven by the government’s policy of keeping customer tariffs frozen despite increases in cost-reflective electricity prices.
The figures highlight the financial burden placed on the government by the continued gap between the actual cost of electricity supply and the tariffs paid by consumers.
