By Omoniyi David
The Federal Government’s electricity subsidy rose sharply from N610 billion in 2023 to N1.94 trillion in 2024; a 219.67% increase, despite the April tariff hike for Band A customers.
According to the Nigerian Electricity Regulatory Commission (NERC), the spike was driven by the naira float and fuel subsidy removal, which intensified inflationary pressures. So far, only N371.34 million of the N1.94 trillion obligation has been paid.
NERC said the subsidy averaged N161.85 billion monthly, as tariffs across all electricity distribution companies (DisCos), remain non-cost-reflective.
Subsidy for Q1 2024 was N633.30 billion; a 303% jump from the 2023 quarterly average.
After the Band A tariff adjustment, Q2 subsidy dropped to N380.06 billion but rose again to N464.12 billion in Q3 and N471.69 billion in Q4 due to a renewed rate freeze.
NERC added that subsidies now cover only generation costs under a new DisCo Remittance Obligation framework.
Power sector analyst Adedayo Fadipe cautioned that removing subsidies won’t guarantee sector stability, warning of increased electricity theft.
Aliko Dangote, meanwhile, urged local investors to commit to power projects, noting his group generates over 1,500MW independently.
