By Opeyemi Adewale, JKNewsMedia Reporter
MOUNTING LOSES in the electricity sector pushed the government’s subsidy obligation to ₦536.4billion in the first quarter of 2025, driven by a continued freeze on cost-reflective tariffs.
The Nigerian Electricity Regulatory Commission (NERC) revealed the figure in its latest quarterly report, highlighting that the current tariffs paid by customers remain significantly below actual market costs.
The commission explained that the federal government covered 59.16 percent of the total invoice from the Nigerian Bulk Electricity Trading (NBET) during the period under review.
This marked an increase of ₦64.7billion compared to the ₦471.69billion incurred in the fourth quarter of 2024, which accounted for 56.65 percent of the NBET invoice.
NERC attributed the widening subsidy gap to a federal policy that maintains existing electricity tariffs despite rising generation costs.
As a result, the government continues to absorb the shortfall between the actual cost of electricity and what consumers are allowed to pay under the current pricing framework.
To streamline the process, the subsidy is applied specifically to generation costs payable by DisCos to NBET, recorded as the DisCo’s remittance obligation (DRO).
This figure reflects the portion of GenCo invoices covered under existing tariffs, while the government shoulders the remaining difference.
Within the first quarter of 2025, the DRO-adjusted invoice from NBET to the DisCos stood at ₦370.36billion.
Of this amount, the DisCos remitted ₦354.77billion, representing a 95.79 percent performance rate.
This marked an improvement from the fourth quarter of 2024, when the adjusted invoice was ₦360.96billion, and ₦336.63billion was remitted—translating to a 93.26percent remittance rate.
NERC cited an 8.59percent rise in revenue collections by DisCos in Q1 2025 as the main driver of improved remittance performance.
This outpaced the 2.61 percent increase in the adjusted invoice value over the same period.
Performance varied across individual DisCos. Benin, Eko, Ibadan, Ikeja, Kano, Port Harcourt, and Yola DisCos achieved full (100%) remittance to NBET. Abuja and Enugu DisCos followed with 98.43 percent and 99.27 percent respectively.
Kaduna DisCo posted the weakest showing at 37.77 percent.
The quarter-on-quarter analysis showed most DisCos improved their remittance rates, except for Jos and Kaduna, which declined by 10.09 and 3.26 percentage points respectively.
Port Harcourt, Benin, and Enugu recorded the most significant gains, with increases of 10.27, 9.97, and 8.90 percentage points respectively.
