According to the most recent data published by the Nigerian Electricity Regulatory Commission (NERC), the Federal Government recorded a subsidy obligation of ₦418.79 billion in the fourth quarter of 2025.
The graph illustrates the government’s ongoing financial strain in maintaining Nigeria’s power market in the face of non-cost-reflective charges.
The Nigerian Bulk Electricity Trading Plc’s Differential Remittance Obligation-adjusted invoice to electricity distribution companies and the total invoice from power generation companies both decreased during the period, according to the electricity market regulator’s Q4 2025 quarterly report.
According to the commission, the subsidy decreased by ₦39.96 billion, or 8.71 percent, from ₦458.75 billion in the third quarter of 2025.
According to Naija News, additional investigation revealed that government subsidies made up 52.30 percent of GenCo’s total invoice in Q4, down 6.60 percentage points from 58.63 percent in Q3.
The commission cited higher energy allocation to high-paying clients as an explanation for the reduction.
NERC claims that a major factor in reducing the subsidy load was the increase in supply to Band A consumers, which went from 40% to 45%.
According to the report, this is in line with the Federal Government’s policy directive to enhance the sector’s cost recovery and quality of energy delivery.
Regarding remittance performance, the report stated that in Q4 2025, the Nigerian Bulk Electricity Trading Plc’s DRO-adjusted invoice to DisCos was ₦386.13 billion.
The distribution companies remitted ₦359.27 billion of this total, resulting in a 93.04 percent remittance performance.
Compared to the third quarter, when DisCos remitted ₦308.25 billion out of ₦323.7 billion, attaining a 95.23 percent performance, this is a little decline.
A breakdown of remittance performance revealed that although the majority of distribution companies fulfilled their responsibilities in full, some had deficiencies.
Yola (99.42 percent), Benin (98.30 percent), Ibadan (95.58 percent), Kano (75.14 percent), Jos (49.80 percent), and Kaduna (40.73 percent) are among them.
“In the absence of cost-reflective tariffs, the Government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff subsidies,” the commission said, reiterating the government’s role in maintaining the industry.
