The Federal Government spent N1.92 trillion on electricity tariff subsidies in 2025, as it continued to cover the gap between the cost of generating electricity and the tariffs paid by consumers, according to the Nigerian Electricity Regulatory Commission (NERC).
NERC disclosed this in its 2025 industry report, stating that the government’s gross tariff subsidy obligation stood at N1.928 trillion during the year. The figure represented 57.44 per cent of the total invoice issued by the Nigerian Bulk Electricity Trading Company (NBET).
On average, the government’s subsidy obligation amounted to about N160.69 billion every month.
According to the report, the subsidy stood at N536.40 billion in the first quarter of 2025, N514.36 billion in the second quarter, N458.76 billion in the third quarter and N418.79 billion in the fourth quarter.
The 2025 figure was slightly lower than the N1.949 trillion recorded in 2024, despite the Federal Government’s decision to maintain electricity tariffs at the rates approved in July 2024.
NERC attributed the decline in the subsidy obligation to lower electricity consumption by electricity distribution companies (DisCos) and a rise in the proportion of electricity supplied to customers in Band A.
The commission said 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.
NERC explained that the subsidy remained necessary because electricity tariffs across the country were still below cost-reflective levels.
“Due to the absence of cost-reflective tariffs across all DisCos, the Government incurred a subsidy obligation of N1,928.31 billion,” the commission stated.
It added that the subsidy was largely driven by the government’s policy of keeping customer tariffs below the cost-reflective rates despite rising electricity costs.
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