By Ayomide Otitoju
The Federal Government recorded a subsidy obligation of ₦418.79 billion in the fourth quarter of 2025, according to the latest report by the Nigerian Electricity Regulatory Commission.
In its 2025 Q4 report, the regulator disclosed that the subsidy represented a ₦39.96 billion decline from the ₦458.75 billion recorded in the third quarter, reflecting an 8.71 percent reduction.
The report noted that government subsidy accounted for 52.30 percent of total invoices from power generation companies (GenCos), down from 58.63 percent in the previous quarter.
NERC attributed the decline to an increase in energy allocation to Band A customers—from 40 percent to 45 percent—as part of efforts to improve power supply quality.
Data from the report showed that the Differential Remittance Obligation (DRO)-adjusted invoice issued by Nigerian Bulk Electricity Trading Plc to electricity distribution companies (DisCos) stood at ₦386.13 billion in Q4, with total remittances of ₦359.27 billion, translating to a 93.04 percent performance rate.
This compares to ₦323.70 billion invoiced and ₦308.25 billion remitted in Q3, representing a higher remittance performance of 95.23 percent in the previous quarter.
The commission explained that in the absence of cost-reflective tariffs, the government covers the gap between actual costs and approved tariffs through subsidies, applied at source via the DRO mechanism.
A breakdown of DisCos’ remittance performance showed that most operators achieved full remittance, while a few—including Yola, Benin, Ibadan, Kano, Jos, and Kaduna—recorded below 100 percent performance, with Kaduna and Jos posting the lowest figures.
Quarter-on-quarter analysis indicated improvements in remittance by Benin and Kaduna DisCos, while Kano, Jos, Ibadan, and Yola recorded declines. Other DisCos, including Abuja, Eko, Enugu, Ikeja, and Port Harcourt, maintained full remittance compliance across both quarters.
The report underscores ongoing challenges in Nigeria’s electricity market, particularly around tariff structures and subsidy sustainability.
