THE Nigerian government has continued intervening in Nigeria’s power sector through electricity subsidy payments to the tune of over N1 trillion in the first quarter of 2025, despite power sector privatisation.
The Nigerian Electricity Regulatory Commission (NERC) revealed that the subsidy for electricity consumed in the first half of 2025 was N1.186 trillion.
The NERC disclosed this in the latest analysis and report of monthly Multi-Year Tariff Orders (MYTO), in addition to the Federal Government’s outstanding debt of over N4 trillion owed to electricity generation companies.
The NERC’s order showed that the subsidy owed to Electricity Distribution Companies (DisCos) increased by 27 per cent from the N935.81 billion the Federal Government incurred in the second half of 2024 and a 17 per cent from the N1.013 trillion incurred in the first half of 2025.
A breakdown of the subsidy indicated that the government owed N196.4 billion in January, N193.09 billion in February, N194.6 billion in March, N198.4 billion in April, N201.7 billion in May, and N201.8 billion in June.
It also showed that the Abuja Electricity Distribution Company (AEDC) got the highest amount of N170.6 billion, followed by Ikeja Electricity Distribution Company (IE) with N163.7 billion, then Ibadan Electricity Distribution Company (IBEDC) with N144.7 billion.
Other DisCos include Eko Electricity Distribution Company (EKDC), N137.7 billion, Benin Electricity Distribution Company (BEDC) with N94.7 billion, Enugu Electricity Distribution Company (EEDC) with N94.4 billion, Port Harcourt Electricity Distribution Company (PHEDC) with N87.9 billion, Kaduna Electricity Distribution Company (KAEDCO) with N87.2 billion, Kano Electricity Distribution Company (KEDCO) with N85.08 billion, Jos Electricity Distribution Company (JEDC) with N72.6 billion, and Yola Electricity Distribution Company (YEDC) with N47.1 billion.
While giving the reason for the electricity subsidy, NERC explained that in the absence of cost-reflective tariffs, the government undertakes to cover the resultant gap between the cost-reflective and permissible tariff in the form of tariff subsidies.
But for ease of administration, the subsidy is only applied to the generation cost payable by DisCos to Nigeria Bulk Electricity Trading Company (NBET) at source in the form of a DisCo’s Remittance Obligation (DRO).
The Order indicated further that the DRO represented the total GenCo invoice that is billed to the DisCos by Nigerian Bulk Electricity Trading plc (NBET) based on what the allowed DisCo tariffs could cover.
On April 3, 2024, NERC declared that Band A customers would see an instant increase in power tariff from N68 to N225 per kilowatt-hour.
The ICIR reported that on April 13, 2025, the Minister of Information and National Orientation, Mohammed Idris, in a statement, said 85 per cent of Nigerians who fit into various categories under the new electricity supply regime continued to receive the subsidy.
He claimed that only 15 per cent of the population, comprising mostly wealthy individuals and industrial clusters, classified under Band A, paid a cost-reflective tariff and did not enjoy a subsidy.
The subsidy has led to rising debt in the power sector, with the government struggling to close the gap amid dwindling oil revenue resources.
In May, the Association of Power Generating Companies (APGC) threatened to shut down tools over the N4 trillion owed by the Federal Government in subsidy and legacy debt. They include N2 trillion for 2024 and N1.9 trillion for legacy.
But in April, the Minister of Power, Adebayo Adelabu, promised to pay the debt following high-stakes talks between him and the chairmen of Generating Companies of Nigeria (GenCos) in Abuja.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.