FG Incurs N418bn Power Subsidy

‎The Federal Government incurred a subsidy obligation of ₦418.79 billion in the fourth quarter of 2025, according to the latest data from the Nigerian Electricity Regulatory Commission (NERC).

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‎The electricity market regulator in its 2025 Q4 Quarterly report, noted that total amount invoiced by the GenCos for energy delivered to each DisCo and the Differential Remittance Obligation- DRO-adjusted Nigerian Bulk Electricity Trading Plc (NBET) invoice to the respective DisCos during 2025/Q4, represented a ₦39.96 billion (-8.71%) reduction in subsidy compared to 2025/Q3 (₦458.75 billion).

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‎Government subsidy accounted for 52.30% of the total GenCo invoice, which is a 6.60 percentage point decrease compared to 2025/Q3, when the subsidy accounted for 58.63% of the total GenCo invoice.

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‎NERC noted that the reduction in subsidy payment was due to the increase in energy allocated to Band A customers from 40% to 45%, reflecting the strategic direction of the government to improve the quality of supply to consumers.

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‎In 2025/Q4, the DRO-adjusted invoice from NBET to the DisCos was ₦386.13 billion, while the total remittance made was ₦359.27 billion, which translates to 93.04% remittance performance.

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‎Comparatively, in 2025/Q3, the DRO-adjusted invoice from NBET to DisCos was ₦323.70 billion, and the total remittance was ₦308.25 billion, which translated to 95.23% remittance performance.

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‎“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.

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‎“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 (DRO)”, the report noted.

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‎The DRO represents the total GenCo invoice that is billed to the DisCos by NBET based on what the allowed DisCo tariffs can cover20.

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‎Furthermore, DisCos are expected to remit 100% of the invoices received from the MO for transmission and administrative service costs.

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‎Disaggregated remittance performance of the DisCos to NBET in 2025/Q4 shows that all DisCos except Yola (99.42%), Benin (98.30%), Ibadan (95.58%), Kano (75.14%)25, Jos (49.80%), and Kaduna (40.73%) achieved 100% remittance performance.

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‎A quarter-on-quarter analysis showed that Benin (+3.53pp) and Kaduna (+0.56pp) DisCos recorded improvements in remittance performance to NBET in 2025/Q4 compared to 2025/Q3, while Kano (-23.60pp), Jos (-15.34pp), Ibadan (-4.42pp), and Yola (-0.58pp) recorded decreases in remittance performance.

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‎All other DisCos (Abuja, Eko, Enugu, Ikeja, and Port Harcourt) maintained 100% remittance to NBET across the quarters.

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