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).
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).
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.
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.
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.
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.
“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.
“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.
The DRO represents the total GenCo invoice that is billed to the DisCos by NBET based on what the allowed DisCo tariffs can cover20.
Furthermore, DisCos are expected to remit 100% of the invoices received from the MO for transmission and administrative service costs.
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.
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.
All other DisCos (Abuja, Eko, Enugu, Ikeja, and Port Harcourt) maintained 100% remittance to NBET across the quarters.