Abuja, Nigeria – January 6, 2026: The Federal Government of Nigeria incurred a total of N1.98 trillion in electricity subsidy obligations over the 12-month period from October 2024 to September 2025, according to the latest quarterly reports from the Nigerian Electricity Regulatory Commission (NERC).
The report shows that the subsidy burden was N471.69 billion in Q4 2024, N536.4 billion in Q1 2025, N514.35 billion in Q2 2025, and N458.75 billion in Q3 2025. Despite adjustments to the Band A electricity tariff in April 2024, the subsidy remains high as electricity tariffs continue to be below cost-reflective levels.
NERC explained that the subsidy is applied at source through the DisCos’ Remittance Obligations (DROs) to the Nigerian Bulk Electricity Trading Plc (NBET). Under this framework, the Federal Government covers the gap between cost-reflective and allowed tariffs, ensuring that power generation companies receive full payment.
The commission noted a slight decline in the subsidy in Q3 2025 due to lower energy offtake by DisCos (down 6.08%) and a marginal decrease in generation costs (0.98%). The subsidy in Q3 accounted for 58.63% of total GenCo invoices, compared with 59.60% in the previous quarter.
On DisCos’ payment performance, NERC reported a 95.23% remittance rate to NBET in Q3, with most DisCos meeting 100% of their obligations. Exceptions included Kano (98.74%), Benin (94.77%), Jos (65.13%), and Kaduna (40.16%). Remittances to the Market Operator also remained high at 95.13%, up slightly from 95.07% in Q2.
NERC highlighted that the DRO framework, which replaced the Minimum Remittance Obligation regime in January 2024, is designed to protect DisCos from unpaid subsidy debts and enable critical investment in distribution networks. The regulator stressed that electricity subsidy payments are fully lawful, constitutionally backed, and essential for maintaining power sector stability while tariff reforms are implemented.
