In Nigeria, the cost of electricity subsidies reached 1.98 trillion naira over twelve months, in despite the price increases applied to some consumers. According to Data published by the Nigerian Electricity Regulatory Commission (NERC), the federal government continued to absorb the tariff gap approved and the actual cost of supplying electricity over the period from from October 2024 to September 2025.

Quarterly reports from NERC show that subsidies amounted to 471.69 billion naira in the fourth quarter of 2024, before increasing to 536.4 billion Naira in the first quarter of 2025. They then fell slightly to 514.35. billion naira in the second quarter, then to 458.75 billion naira in third quarter, bringing the annual total to nearly 2 trillion nairas.

In his latest report published on Tuesday, the regulatory authority explains that these subsidies remain essential, because the electricity rates for the majority of categories of customers remain below the real costs of production and distribution. The NERC stresses that the budgetary burden remains high despite the adjustment Tranche A tariff introduced in April 2024, which abolished the subsidies for customers benefiting from at least 20 hours of electricity by day.

Concretely, the Government closes the gap between authorized rates and the cost of procurement through subsidies applied at the source, mainly via the payment obligations of electricity distribution companies to the Nigerian Bulk Electricity Trading Plc (NBET), the sole purchaser of electricity on the market.

Maintaining this Mechanism intervenes as the federal state is struggling to pay off an additional debt of 4 trillion naira due to power generation companies. This situation is fuelling concerns about the liquidity of the entire chain. of value in the sector, already weakened by structural constraints.