New data from the Nigerian Electricity Regulatory Commission (NERC) reveals that Nigeria’s electricity subsidy commitments have surged to a staggering N1.98 trillion over the year spanning from October 2024 to September 2025. This figure is based on the latest quarterly reports issued by the regulatory body.
The escalating cost of these subsidies has reignited discussions surrounding the potential implementation of a widespread tariff increase for electricity consumers across the nation.
NERC’s report, released Tuesday, indicates a substantial government expenditure on electricity subsidies: N471.69 billion in the final quarter of 2024 (October to December), N536.4 billion in the first quarter of 2025, N514.35 billion in the second quarter, and N458.75 billion in the third quarter of 2025. This persistent subsidy burden is attributed to electricity tariffs remaining below levels that accurately reflect the true cost of supply.
According to NERC, only Band A consumers experienced a tariff adjustment in April 2024. The regulator emphasizes that the failure to implement cost-reflective tariffs for other consumer bands has significantly contributed to the escalating subsidy obligations.
This dramatic increase in subsidies occurs as the federal government grapples with a pre-existing burden of N4 trillion in historical debts owed to electricity generation companies.
Last year, Minister of Power Adebayo Adelabu repeatedly asserted that the current subsidy model is unsustainable. He proposed a revised approach focused on providing targeted assistance specifically to low-income households. Adelabu has been a vocal proponent of a further electricity tariff increase as a means of gradually eliminating the burden of electricity subsidies altogether.
In an attempt to alleviate the liquidity challenges within the Nigerian Electricity Supply Industry (NESI), the government introduced a N4 trillion bond in December 2025, earmarked for the repayment of these long-standing legacy debts.
As of yet, there has been no formal announcement regarding investor interest in this bond offering.
