Nigeria’s electricity subsidy bill climbed to N1.928 trillion in 2025, as the Federal Government continued to absorb the widening gap between the cost of supplying electricity and the tariffs paid by customers. The figure was disclosed by the Nigerian Electricity Regulatory Commission (NERC) in its 2025 industry report, highlighting the growing financial burden of keeping electricity tariffs below cost-reflective levels.
According to NERC, the government’s gross tariff subsidy obligation represented 57.44 per cent of the total Nigerian Bulk Electricity Trading (NBET) invoice for the year. On average, this amounted to about N160.69 billion every month, showing just how much the government had to spend to bridge the gap and keep electricity costs from rising further for consumers.
The subsidy obligation stood at N536.40 billion in the first quarter, before dropping to N514.36 billion in the second quarter, N458.76 billion in the third quarter and N418.79 billion in the final quarter of 2025. Although the annual figure was still substantial, it was slightly lower than the N1.949 trillion recorded in 2024, despite the government’s directive to maintain customer electricity tariffs at the rates approved in July 2024.
NERC attributed the gradual decline in the subsidy obligation to lower energy off-take by electricity distribution companies (DisCos) and a shift in the amount of electricity supplied to higher-paying customer categories. The commission noted that the share 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, contributing to the reduction in the subsidy burden.
The regulator said the subsidy was largely driven by the government’s decision to freeze allowed customer tariffs even as the cost-reflective tariffs increased. NERC explained that the absence of cost-reflective tariffs across all DisCos resulted in the government incurring the N1.928 trillion subsidy obligation, underscoring the difficult balance between protecting electricity consumers from higher bills and ensuring that the power sector remains financially sustainable.
source: vanguard
