- The Federal Government of Nigeria spent N458.75 billion to freeze electricity tariffs for most Nigerian consumers in the third quarter (Q3) of 2025.
- NERC explained that the subsidy resulted from the continued freezing of end-user tariffs at July 2024 levels, despite higher costs across the power value chain.
The Federal Government of Nigeria spent N458.75 billion to freeze electricity tariffs for most Nigerian consumers in the third quarter (Q3) of 2025, according to the Nigerian Electricity Regulatory Commission (NERC).
The subsidy was disclosed in NERC’s 2025 third-quarter report, released on January 6, and was aimed at maintaining stability in the electricity market amid rising generation costs and weak remittances from international electricity customers.
NERC explained that the subsidy resulted from the continued freezing of end-user tariffs at July 2024 levels, despite higher costs across the power value chain.
Without government intervention, total generation costs for the quarter would have reached N782.45 billion. However, the subsidy reduced the Nigerian Bulk Electricity Trading Plc (NBET) invoice payable by distribution companies (DisCos) to N323.70 billion during the period.
The report noted that tariff payments are enforced by DisCos, which incorporate exchange rate differentials to support cost recovery and attract investment.
The Federal Government has also implemented a band-based tariff system, under which consumers with longer daily supply hours are expected to pay more. However, the system has faced widespread criticism over inefficiencies and failure to deliver the promised hours of electricity.
Despite the subsidy support, DisCos recorded only modest improvements in operational performance. The total value of energy offtake by DisCos in Q3 stood at N854.53 billion, while total energy billed was N706.61 billion, resulting in a billing efficiency of 82.69 per cent, an improvement from 81.61 per cent in the previous quarter. Billing losses during the period amounted to N147.92 billion.
Revenue collection also improved, with DisCos collecting N570.25 billion out of the N706.61 billion billed, translating to a collection efficiency of 80.70 per cent, up from 76.07 per cent in Q2.
However, Aggregate Technical, Commercial and Collection (ATC&C) losses remained high at 33.27 per cent, far above the 2025 Multi-Year Tariff Order target of 20.54 per cent. Although this represented an improvement from 37.92 per cent in the previous quarter, it still resulted in revenue losses of N108.75 billion.
Only Eko and Ikeja DisCos met their ATC&C targets, while Kaduna DisCo recorded the worst performance with losses of 71.10 per cent.
On market remittances, DisCos were billed N400.48 billion upstream, comprising NBET and transmission-related charges. They remitted N381.29 billion, achieving a remittance performance of 95.21 per cent. However, international bilateral customers paid only $7.13 million out of $18.69 million invoiced, while domestic bilateral customers recorded a stronger remittance rate of 87.61 per cent.