The Nigerian Electricity Regulatory Commission INERC) says that the Nigerian Government incurred a subsidy obligation of N418.79bn in the fourth quarter of 2025 and that losses across the electricity value chain was N300bn during the period.
According to the commission’s 2025 fourth-quarter report, total invoices issued by generation companies for electricity produced in the quarter amounted to N804.93bn.
However, due to non-cost-reflective tariffs, the government absorbed 52.30 per cent of the cost.
“It is important to note that due to the absence of cost-reflective tariffs across all DisCos, the government incurred a subsidy obligation of N418.79bn; this represents a N39.96bn (-8.71 per cent) reduction in FGN subsidy compared to 2025/Q3,” the commission said,
The report added that the subsidy covered more than half of generation costs, leaving distribution companies to pay only N386.13bn.
“The government subsidy accounted for 52.30 per cent of the total GenCo invoice, which is a 6.60pp decrease compared to 2025/Q3,” the commission noted.
Despite the intervention, the sector recorded significant commercial losses. While the total value of electricity supplied to distribution companies stood at N969.19bn, only N795.06bn was billed to customers.
“The naira value of the total energy offtake by all DisCos in 2025/Q4 was N969.19bn, and the total energy billed was N795.06bn, which translates to a billing efficiency of 82.03 per cent.
The billing efficiency of 82.03 per cent recorded during the quarter represents a decrease of 0.66pp compared to 2025/Q3 (82.69 per cent). At an aggregate level, DisCos cumulatively recorded billing losses of N174.12bn in 2025/Q4,” the report said.
In addition, high aggregate technical, commercial, and collection losses further weakened sector finances. “The weighted average ATC&C loss across all DisCos in 2025/Q4 was 34.9 per cent, translating to a cumulative revenue loss of N139.19bn across all DisCos,” the report noted.
Combined, the billing losses of N174.12bn and ATC&C revenue losses of N139.19bn indicate inefficiency-driven losses of over N300bn during the quarter.
The report also showed that distribution companies received 7,991.22GWh of electricity but billed customers for only 6,614.57GWh, indicating persistent energy accounting inefficiencies.
“Although the total energy received by all DisCos in 2025/Q4 was 7,991.22GWh, the energy billed to end-use customers was only 6,614.57GWh,” it added.
GIK/APA