Electricity subsidy dips to N514.35b in Q2 2025

• DisCos collect ₦564.71 billion revenue; International customers pay $9.01m

The Nigerian Electricity Regulatory Commission (NERC) has said the cost of Federal Government electricity subsidy reduced to N514.35 billion in the second quarter of 2025 (Q2 2025) from the N536.40 paid in the Q1 2025. The decline was by 4.11 per cent, according to the commission’s Q3 Report.
The payment of subsidy, the report noted, was incurred due to lack of a cost-reflective tariff.
NERC said, “The total amount invoiced by the GenCos for energy delivered to each DisCo and the DRO- adjusted NBET invoice to the respective DisCos during 2025/Q2.
“It is important to note that due to the absence of cost-reflective tariffs across all DisCos, the Government incurred a subsidy obligation of ₦514.35 billion 21; this represents a ₦22.04 billion (-4.11 per cent) reduction in FGN subsidy compared to 2025/Q1 (₦536.40 billion).”
The report also noted that although the subsidy obligation of the government decreased in naira terms (-₦22.04 billion), it accounted for 59.60 per cent of the total GenCo invoice, which is a
0.44pp increase compared to 2025/Q1 when subsidy accounted for 59.16 per cent of the total GenCo invoice.
NERC said this is because the actual generation cost (₦/kWh) increased by 0.59 per cent, while the allowed end-user tariffs remained unchanged across the quarters.
According to the report, the total revenue collected by all DisCos in 2025/Q2 was ₦564.71 billion out of the ₦742.34 billion that was billed to customers.
This, said NERC, translates to a collection efficiency of 76.07 per cent.
In comparison, the report said, the total revenue collected by all DisCos in 2025/Q1 was ₦553.63 billion out of the ₦744.26 billion billed to customers, which translated to a 74.39 per cent collection efficiency.
This means that at an aggregate level, DisCos recorded a 1.68pp increase in collection efficiency between 2025/Q1 and 2025/Q2, according to the report.
NERC revealed that in 2025/Q2, three DisCos recorded collection efficiencies greater than 80 per cent with Eko (87.80 per cent) recording the highest collection efficiency.
Conversely, it said Jos DisCo recorded the lowest collection efficiency at 43.82 per cent .
It added that on there other hand, the remaining five DisCos recorded declines in collection efficiency, with Abuja (-3.93pp) and Jos (-3.37pp) DisCos having the most significant declines
across the quarters.
NERC explained that the Market Operator issues invoices to DisCos for energy transmission and administrative services.
The report said the period under review, DisCos made a total remittance of ₦65.30 billion against the cumulative invoice of ₦68.68 billion issued by the MO.
This payment, according to the report, translates to 95.07 per cent remittance performance and is a 1.25pp decrease
when compared to 96.32 per cent remittance performance recorded in 2025/Q1 when DisCos remitted ₦59.49 billion out of ₦61.76 billion invoice issued by the MO.
On the remittances made by bilateral customers (domestic and international) and special customers for invoices issued in 2025/Q2 by the MO, NERC noted they are the six international bilateral customers being supplied by GenCos in the NESI made a payment of $9.01 million against the cumulative invoice of $17.54 million issued by the MO for services rendered in 2025/Q2, translating to a remittance performance of 51.33 per cent .
It also said the domestic bilateral customers made a cumulative payment of ₦1.401.00 billion against the invoice of ₦2.796.29 billion issued to them by the MO for services rendered in 2025/Q2, translating to 50.10 per cent remittance performance.
The report explained that one domestic bilateral customer made payments during 2025/Q2 for outstanding MO invoices from previous quarters.
NERC said the MO received ₦10.53 million from Trans-Amadi (OAU/FMPI) towards outstanding invoices from previous quarters.
Meanwhile, it said the special customer (Ajaokuta Steel Co. Ltd and the host community) did not make any payment towards the ₦1.27 billion (NBET) and ₦0.12 billion (MO) invoices received in 2025/Q2.
It explained that this continues a longstanding trend of non-payment by this customer, and the Commission has communicated the need for intervention on this issue to the relevant FGN authorities.