The Federal Government incurred a staggering N1.93 trillion electricity tariff subsidy obligation in 2025, absorbing more than half of the total electricity invoice issued by the Nigerian Bulk Electricity Trading Plc (NBET), as it continued to shield consumers from the full cost of power.
The figure, contained in the 2025 Nigerian Electricity Regulatory Commission (NERC) industry report, represents 57.44 per cent of NBET’s total invoice, translating to an average government subsidy burden of about N160.69 billion every month.
NERC put the quarterly subsidy obligations at N536.40 billion in Q1, N514.36 billion in Q2, N458.76 billion in Q3 and N418.79 billion in Q4.
Despite the huge financial commitment, the 2025 figure marked a marginal decline from the N1.949 trillion recorded in 2024.
The commission attributed the reduction to lower energy off-take by electricity distribution companies (DisCos), alongside an increase in the proportion of electricity supplied to customers in Band A, whose allocation rose as part of efforts to prioritise customers receiving improved supply.
According to NERC, the proportion of energy 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 stated.
NERC explained that the subsidy was largely driven by the Federal Government’s decision to freeze customer tariffs at approved July 2024 rates, even as the actual cost of generating and supplying electricity continued to rise.
The latest figures highlight the enormous fiscal burden of Nigeria’s electricity pricing regime, with the government effectively shouldering a substantial portion of the gap between what power supply costs and what millions of electricity consumers pay.
