The Federal Government incurred a total of N536.4bn in electricity subsidy obligations in the first quarter of 2025 alone, amid its struggles to pay over N4tn debt owed to power generation companies.
The Nigerian Electricity Regulatory Commission disclosed this in its latest report obtained by our correspondent, saying the subsidy obligation of the government increased by N64.7bn, from N471.69bn in the last quarter of 2024 to N536.4bn in Q1 2025.
According to the commission, the N536.4bn was 59.16 per cent of the total GenCo invoice for the quarter. NERC stated that in the absence of cost-reflective tariffs, the government undertakes to cover the resultant gap between the cost-reflective and allowed tariffs in the form of tariff subsidies.
But for ease of administration, NERC said “the subsidy is only applied to the generation cost payable by DisCos to NBET (Nigerian Bulk Electricity Trading Plc) at source in the form of a DisCo’s Remittance Obligation.”
To manage subsidy administration, it was said that the government implemented a DisCo Remittance Obligation framework to be paid to the Market Operator, which defines the amount each DisCo is expected to pay to NBET based on what their allowed tariffs can cover.
