By ObasEsiedesa, Abuja
The electricity tariff subsidy obligation of the Federal Government (FG) stood at N1.92 trillion in 2025, as the government continues to absorb the gap between cost-reflective electricity tariffs and rates paid by customers, according to the Nigerian Electricity Regulatory Commission (NERC).
NERC, in its 2025 industry report, put the government’s gross tariff subsidy obligation at N1.928 trillion for the year, representing 57.44 per cent of the total Nigerian Bulk Electricity Trading (NBET) invoice. The amount translates to an average subsidy obligation of N160.69 billion monthly.
The subsidy obligation stood at N536.40 billion in the first quarter, N514.36 billion in the second quarter, N458.76 billion in the third quarter and N418.79 billion in the fourth quarter.
The 2025 figure represented a slight decline from the N1.949 trillion recorded in 2024, despite the FG’s directive to freeze customer electricity tariffs at the July 2024 approved rates.
NERC attributed the gradual reduction in the quarterly subsidy obligation to reduced energy off-take by electricity distribution companies (DisCos), compared with previous quarters, as well as an increase in the proportion of energy allocated to Band A customers.
The share of energy allocated to bands A and B customers rose 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 said.
It added that the subsidy was largely attributable to the government’s policy of freezing allowed tariffs paid by customers despite increases in cost-reflective tariffs.
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