KEY POINTS

• Nigeria’s Q4 2025 power subsidy fell to N418.79 billion, an N39.96 billion reduction from Q3 2025
• Band A customer allocation rose from 40 to 45 percent, driving the subsidy decline
• Kaduna and Jos posted the lowest DisCo remittance rates at 40.73 percent and 49.80 percent respectively

Nigeria’s power subsidy obligation reached N418.79 billion in the fourth quarter of 2025, a decline of N39.96 billion from the N458.75 billion recorded in the third quarter, according to the Nigerian Electricity Regulatory Commission.

NERC’s Q4 2025 quarterly report linked the reduction to a strategic increase in energy allocated to Band A customers, which the commission raised from 40 percent to 45 percent during the period.

Government subsidy accounted for 52.30 percent of the total Generation Company invoice in Q4 2025, a 6.60 percentage-point decrease from the 58.63 percent share in Q3 2025.

Band A expansion narrows subsidy gap

Meanwhile, NERC noted that the arrangement covers the gap between actual generation costs and approved tariffs. “In the absence of cost-reflective tariffs, the Government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff subsidies,” the commission stated.

Furthermore, the Differential Remittance Obligation-adjusted invoice from the Nigerian Bulk Electricity Trading Plc to distribution companies totaled N386.13 billion in Q4 2025. Total remittance reached N359.27 billion, a 93.04 percent performance rate.

DisCos show mixed remittance performance

However, that rate trailed the 95.23 percent recorded in Q3 2025, when the adjusted invoice stood at N323.7 billion and remittance totaled N308.25 billion.

Additionally, disaggregated remittance data shows that most distribution companies achieved 100 percent performance in Q4 2025. Kaduna recorded the lowest rate at 40.73 percent, while Jos posted 49.80 percent. Kano reached 75.14 percent, with Ibadan at 95.58 percent, Benin at 98.30 percent and Yola at 99.42 percent.

The Nigeria power subsidy data reflects the government’s ongoing effort to phase out below-cost electricity pricing while maintaining supply reliability across consumer bands.