ABUJA — The Federal Government recorded a subsidy obligation of N418.79 billion in the power sector in the fourth quarter of 2025, according to the Nigerian Electricity Regulatory Commission.

Data contained in NERC’s Q4 2025 report showed the figure represents a decline of N39.96 billion, or 8.71 per cent, compared to the N458.75 billion subsidy recorded in the third quarter.

The commission attributed the reduction partly to increased energy allocation to Band A customers, which rose from 40 per cent to 45 per cent within the period, in line with efforts to improve electricity supply to high-paying users.

NERC noted that government subsidy accounted for 52.30 per cent of the total invoice from power generation companies in Q4, down from 58.63 per cent recorded in the previous quarter.

“In the absence of cost-reflective tariffs, the Government undertakes to cover the resultant gap… in the form of tariff subsidies,” the commission stated.

Further breakdown showed that the Nigerian Bulk Electricity Trading Plc issued a Differential Remittance Obligation-adjusted invoice of N386.13 billion to electricity distribution companies during the quarter, out of which N359.27 billion was remitted, translating to a 93.04 per cent remittance performance.

This marks a slight drop from Q3 2025, when DisCos recorded a 95.23 per cent remittance rate, paying N308.25 billion out of a N323.7 billion invoice.

On individual performance, NERC disclosed that most distribution companies met their remittance obligations, while a few underperformed. Yola, Benin, and Ibadan DisCos recorded strong performances at 99.42 per cent, 98.30 per cent, and 95.58 per cent respectively, while Kano (75.14 per cent), Jos (49.80 per cent), and Kaduna (40.73 per cent) lagged behind.

The report highlights the continued reliance on government support to sustain the power sector, amid ongoing concerns over non-cost-reflective tariffs and operational inefficiencies.