The Federal Government recorded a subsidy obligation of ₦418.79 billion in the fourth quarter of 2025, according to the Nigerian Electricity Regulatory Commission (NERC).
In its Q4 2025 report, the regulator noted a decline in subsidy costs compared to the previous quarter, with the figure dropping by ₦39.96 billion from ₦458.75 billion in Q3.
Subsidy payments accounted for 52.30% of total invoices from power generation companies (GenCos), down from 58.63% in the previous quarter.
NERC attributed the reduction to an increase in electricity supply to Band A customers, which rose from 40% to 45% as part of efforts to improve service quality.
During the period, the Nigerian Bulk Electricity Trading Plc (NBET) issued a DRO-adjusted invoice of ₦386.13 billion to distribution companies (DisCos), with ₦359.27 billion remitted—representing a 93.04% performance rate.
This compares to Q3, when remittance performance stood at 95.23%, based on ₦308.25 billion paid out of a ₦323.70 billion invoice.
“In the absence of cost-reflective tariffs, the Government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff subsidies.
“For ease of administration, the subsidy is only applied to the generation cost payable by DisCos to NBET at source in the form of a DisCo’s Remittance Obligation (DRO)”, the report noted.
A breakdown of remittances showed that most DisCos met their obligations fully, while others—including Yola, Benin, Ibadan, Kano, Jos, and Kaduna—fell short, with Kaduna recording the lowest performance at 40.73%.
Quarter-on-quarter analysis showed improvements in Benin and Kaduna, while Kano, Jos, Ibadan, and Yola recorded declines.
Meanwhile, Abuja, Eko, Enugu, Ikeja, and Port Harcourt DisCos maintained 100% remittance performance across both quarters.
