The Federal Government paid ₦471.6 billion in electricity subsidy bills in the fourth quarter (Q4) of 2024.
This was disclosed in the Q4 2024 report released by the Nigerian Electricity Regulatory Commission (NERC).
The report showed that the subsidy obligation accounted for 56.65 percent of the total invoice issued to electricity distribution companies by the Nigerian Bulk Electricity Trading Plc (NBET).
The figure represents an increase of ₦7.5 billion from the ₦464.1 billion spent in the third quarter, which equaled 54.71 percent of the GenCo invoice.
According to NERC, the upward trend in the government’s subsidy obligation is directly linked to the implementation of a tariff freeze policy that prevents the full transfer of rising generation and market costs to end-users.
“The increase in the government’s financial intervention reflects the widening gap between the actual cost of electricity supply and the end-user tariffs approved for billing customers,” the commission noted.
This policy, while providing short-term relief to consumers amid ongoing economic pressures, continues to weigh heavily on public finances.
Sector analysts have warned that without an adjustment to align tariffs with actual market costs, the sustainability of the power sector remains at risk.
The report also revealed concerns about liquidity constraints in the electricity market, stressing that the lack of cost-reflective tariffs limits the ability of DisCos to meet their financial obligations to NBET and other market participants.
NERC reiterated the need for reforms that strike a balance between affordability for consumers and the financial viability of power operators.
