FG Spent N1.93 Trillion on Electricity Subsidy in 2025 - NERC
By Victor Idajil
The Federal Government paid N1.928 trillion in electricity subsidies in 2025 because it kept end-user tariffs below the actual cost of supplying power, the Nigerian Electricity Regulatory Commission has said.
According to NERC’s 2025 Annual Report released on Thursday, the subsidy covers the gap between the cost-reflective tariff and the lower “allowed tariff” that consumers currently pay. The government is required by law to fund that difference.
“Tariff Subsidies: When the allowed end-user electricity tariffs are lower than the cost-reflective tariff as computed by the Commission, the Government undertakes to cover the resultant gap,” NERC explained. “In 2025, the gross subsidy obligation of the FGN was ₦1.928.31 trillion.”
The report also showed better payment performance by electricity distribution companies.
NERC said the Nigerian Bulk Electricity Trading Company and the Market Operator billed DisCos a total of ₦1.721 trillion for energy and administrative services in 2025. The DisCos paid back ₦1.632 trillion, representing a remittance rate of 94.80%.
That left a shortfall of ₦89.58 billion, which NERC described as “market shortfall” attributable to market participants.
Eko, Ikeja and Port Harcourt DisCos recorded 100% remittance to NBET, while Kaduna DisCo had the lowest at 40.13%.
For payments to the Market Operator, Abuja, Benin, Eko, Enugu, Ikeja, Port Harcourt and Yola DisCos all hit 100%. Kaduna DisCo again recorded the lowest at 48.11%.
NERC said Nigeria supplied power to three international bilateral customers in 2025: Benin Republic, Togo and Niger Republic. They were billed $73.91 million by the Market Operator and paid $62.75 million, a remittance performance of 84.90%.
Domestic bilateral customers were invoiced ₦13.20 billion and paid ₦12.75 billion, representing 96.60% remittance.
On generation, NERC said the average available capacity from grid-connected plants in 2025 was 5,398.33MW.
The availability factor stood at 39.62%, meaning more than 60% of installed capacity was not available during the year.
Total electricity generated was 39,208.68GWh, an average of 4,475.88MWh per hour. Hydropower plants contributed 12,804.18GWh, or 32.66% of total output.
