Amid its struggles to pay the over N4tn debt owed to power generation companies, the Federal Government incurred a total of N1.98tn in electricity subsidy obligations in 12 months, from October 2024 to September 2025.
This was according to the quarterly reports released by the Nigerian Electricity Regulatory Commission. In the fourth quarter of 2024, covering October to December, the electricity subsidy incurred by the government was N471.69bn.
It was N536.4bn in the first quarter of 2025 and N514.35bn in the second quarter of last year. The latest report from NERC released on Tuesday showed that the Federal Government incurred a power subsidy burden of N458.75bn in the third quarter of 2025 as electricity tariffs remained below cost-reflective levels, making a total of N1.98tn in the 12-month period, from October 2024 to September 2025.
NERC stated in its reports that in the absence of cost-reflective tariffs, the government undertook to cover the resultant gap between the cost-reflective and allowed tariff in the form of tariff subsidies.
NERC stated that the subsidy is applied at source through the DisCos’ payment obligations to the Nigerian Bulk Electricity Trading Plc. It stated that for ease of administration, the subsidy is only applied to the generation cost payable by DisCos to NBET at source in the form of a DisCo’s Remittance Obligation.
