The Federal Authorities spent a staggering ₦536.4 billion subsidising electrical energy within the first quarter of 2025, in keeping with the Nigerian Electrical energy Regulatory Fee (NERC).
In its newly launched Q1 2025 report, the fee revealed that the fee arose from the failure to implement cost-reflective tariffs throughout all 11 electrical energy distribution corporations (DisCos).
“Because of the absence of cost-reflective tariffs throughout all DisCos, the federal government incurred a subsidy obligation of ₦536.40 billion, which quantities to 59.16% of the whole NBET bill,” the report said.
The determine represents a ₦64.7 billion enhance from the ₦471.69 billion subsidy recorded within the fourth quarter of 2024, when the federal government coated 56.65% of the bill from energy era corporations (GenCos).
NERC defined that the rising subsidy burden was a results of the federal government’s coverage to freeze electrical energy tariffs for shoppers, regardless of growing working prices.
“Within the absence of cost-reflective tariffs, the FGN undertakes funds to cowl the resultant hole between the cost-reflective and allowed tariffs,” the report famous.
The subsidy, the report stated, is utilized solely to the era value element billed by the Nigerian Bulk Electrical energy Buying and selling (NBET), captured by what it calls the DisCo Remittance Obligation (DRO).
DisCo Remittance: Some Shine, Others Stumble
NERC’s report additionally assessed the remittance efficiency of the DisCos to NBET.
In Q1 2025, the DRO-adjusted bill from NBET to the DisCos stood at ₦370.36 billion, of which ₦354.77 billion was remitted—reflecting a 95.79% cost charge. This marks a modest enchancment from This autumn 2024, when DisCos remitted ₦336.63 billion of the ₦360.96 billion billed (93.26%).
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NERC attributed the improved remittance to elevated income assortment by the DisCos in Q1 2025 (+8.59%) in comparison with the earlier quarter, outpacing the two.61% enhance in NBET invoices.
DisCos’ Efficiency Breakdown
Some DisCos achieved excellent scores in remittance:
100% Remittance: Benin, Eko, Ibadan, Ikeja, Kano, Port Harcourt, Yola
90%+ Remittance: Enugu (99.27%), Abuja (98.43%)
Lowest Performer: Kaduna (37.77%)
Quarter-on-quarter enhancements have been recorded throughout most DisCos, with Port Harcourt (+10.27pp), Benin (+9.97pp), and Enugu (+8.90pp) main the pack. Nevertheless, Jos (-10.09pp) and Kaduna (-3.26pp) noticed declines.
NERC concluded that whereas remittance efficiency is enhancing in some areas, the {financial} viability of Nigeria’s energy sector stays strained by the subsidy regime and lack of cost-reflective pricing.
The report is predicted to accentuate debates over the sustainability of electrical energy subsidies and the long-delayed tariff reforms in Nigeria’s energy sector.
