By Obas Esiedesa, Abuja
The Federal Government’s electricity tariff subsidy obligation rose to N1928 trillion in 2025 as it continued to absorb the gap between cost-reflective tariffs and the rates paid by electricity consumers, according to the Nigerian Electricity Regulatory Commission (NERC).
NERC, in its 2025 industry report, said the subsidy represented 5744 per cent of the total Nigerian Bulk Electricity Trading (NBET) invoice, translating to an average obligation of N160.69 billion monthly.
The subsidy obligation stood at N53640 billion in the first quarter, N514.36 billion in the second quarter, N458.76 billion in the third quarter and N418.79 billion in the fourth quarter.
The 2025 figure was slightly lower than the N1949 trillion recorded in 2024.
NERC attributed the decline to reduced energy offtake by electricity distribution companies (DisCos), compared with previous quarters, as well as an increase in the proportion of energy allocated to Band A customers
The commission said the share of energy allocated to Band A customers increased from 40 per cent to 45 per cent in the fourth quarter of 2025, reflecting efforts to improve electricity supply to consumers
“Due to the absence of cost-reflective tariffs across all DisCos, the Government incurred a subsidy obligation of N1,92831 billion,” NERC said.
It added that the obligation was largely attributable to the Federal Government’s policy of freezing allowed customer tariffs despite increases in cost-reflective tariffs
NERC said the 11 DisCos collectively billed customers N2988 trillion in 2025 but collected N2.319 trillion, leaving an outstanding balance of N669.49 billion.
This represented a collection efficiency of 7760 per cent, meaning that about N22.40 out of every N100 billed by the DisCos was not recovered from customers.
Eko DisCo recorded the highest collection efficiency at 8790 per cent, closely followed by Ikeja DisCo at 87.89 per cent, while Kaduna DisCo recorded the lowest at 45.68 per cent.
NERC said the combination of billing and collection inefficiencies continued to weaken the financial liquidity of the electricity industry, limiting the capacity of the Nigerian Electricity Supply Industry (NESI) to expand and attract new investment
The report also showed that average hourly electricity generation on the national grid stood at 4,47588 megawatt-hours per hour (MWh/h) in 2025, translating to total generation of 39,208.68 gigawatt-hours (GWh) during the year.
The commission explained that electricity generation fluctuated based on grid demand, the mechanical availability of generating units and feedstock availability
It noted that power plants were dispatched when grid load was sufficient to absorb the available energy and when plants operated within acceptable technical limits
NERC further reported that, as of December 31, 2025, 6,966,584 customers, representing 5727 per cent of the 12,163,412 active registered customers in the NESI, had electricity meters.
The DisCos installed 972,040 end-use customer meters during the year
This means that more than 519 million active registered customers remained unmetered at the end of 2025.
Nigeria had 14,039MW operational capacity
NERC reported that, as of December 2025, the total nameplate capacity of the 30 operational power plants licensed by the commission stood at 14,039MW
Five of the plants were hydropower facilities, while the remaining 25 were gas-fired thermal plants
Despite the available nameplate capacity, actual electricity generation remained significantly below installed capacity, reflecting constraints relating to plant availability, gas supply, grid demand and other operational and commercial factors