FG's Electricity Subsidy Reaches N1.92tn in 2025

In 2025, the federal government of Nigeria incurred a gross electricity subsidy obligation of N1.928 trillion to address the disparity between cost-reflective energy tariffs and end-user billing rates. The Nigerian Electricity Regulatory Commission (NERC) reported that Abuja, Ikeja, and Eko Electricity Distribution Companies (Discos) were the primary beneficiaries, receiving N278.37 billion, N267.37 billion, and N231.91 billion, respectively.

Together, these three Discos accounted for over 40% of the total subsidy. The subsidy was a result of a government policy that froze customer tariffs, except for those in band ‘A’.

Other Discos, such as Ibadan, Benin, and Enugu, also received significant subsidies, with Ibadan Disco requiring N239.94 billion. The total subsidy commitment showed a decline throughout the year, with N536.40 billion in Q1, N514.36 billion in Q2, N458.76 billion in Q3, and N418.79 billion in Q4.

This reduction was attributed to operational adjustments rather than tariff increases, including an increase in grid electricity allocation to Band A customers.