By Samuel Adeola
The Federal Government spent N536.4 billion on electricity subsidies in the first quarter of 2025, due to the continued absence of cost-reflective tariffs, the Nigerian Electricity Regulatory Commission (NERC), has disclosed.
According to NERC’s Q1 2025 report, the subsidy represented 59.16% of the total invoice from generation companies (GenCos), settled through the Nigerian Bulk Electricity Trading Plc (NBET). The amount rose by N64.7 billion from the N471.69 billion spent in the fourth quarter of 2024.
“The increase in subsidy obligation is a result of the federal government’s policy to freeze allowed tariffs paid by customers despite a rise in cost-reflective tariffs across quarters,” the report stated.
The government applies the subsidy at source by covering part of the GenCos’ generation costs through what is known as the Distribution Companies’ (DisCos) Remittance Obligation (DRO), the invoice owed by DisCos to NBET based on their allowed tariffs.
In Q1 2025, the DRO-adjusted invoice to DisCos stood at N370.36 billion, while actual remittances totaled N354.77 billion, indicating a remittance performance of 95.79%.
This marked an improvement from Q4 2024, when DisCos remitted N336.63 billion out of a N360.96 billion invoice-a performance of 93.26%.
NERC attributed the improvement to an 8.59% increase in revenue collections by DisCos, compared to a 2.61% rise in NBET’s invoice over the same period.
A breakdown of remittance performance by distribution companies showed that Benin, Eko, Ibadan, Ikeja, Kano, Port Harcourt, and Yola DisCos achieved 100% remittance.
Abuja and Enugu DisCos followed with 98.43% and 99.27%, respectively. Kaduna DisCo recorded the lowest performance, remitting just 37.77%.
“On a quarter-on-quarter basis, all DisCos improved except Jos (-10.09 percentage points) and Kaduna (-3.26 percentage points),” the report noted. “Port Harcourt (+10.27pp), Benin (+9.97pp), and Enugu (+8.90pp) recorded the highest improvements.”
