Electricity subsidy may hit N2.4 trillion this year

Electricity consumers, especially about 30 percent of Nigerians, who live in urban centres will be subsidised to the tune of N2.4 trillion in 2025, although generation will remain epileptic.

The subsidy, which hovers around the same amount as last year, remained a hiding space for a non-performing power sector where electricity generation remained dismal and losses from the distribution companies are on the high side.

Denying possible increases in electricity tariff, Special Adviser to the President on Energy, Olu Verheijen, who clarified that her recent comments on power sector reforms was misinterpreted, said about N200 billion subsidy is incurred monthly by the Federal Government.

“This is misrepresentation of what I said in a recent press interview. I highlighted that, following the increase in Band A tariffs in 2024, current tariffs now cover approximately 65 per cent of the actual cost of supplying electricity, with the Federal Government continuing to subsidise the difference,” she said.

Verheijen emphasised that the government’s focus remains on improving the electricity supply, reducing outages, and protecting vulnerable Nigerians. She outlined key priorities, including the rollout of 7 million prepaid meters to eliminate estimated billing, restructuring electricity subsidies to benefit low-income households, and settling debts owed to power generation companies.

According to her, the federal government spends over N200 billion per month on electricity subsidies, but much of the support benefits the wealthiest 25 percent of Nigerians rather than those who truly need assistance.

To address this, Verheijen said the federal government is working towards a targeted subsidy system to ensure that low-income households receive the most support.

“This approach will make electricity more affordable and accessible for millions of hardworking families,” she said. A breakdown of the subsidy across DisCos and grouping of their franchises going by the latest records from the Nigerian Electricity Regulatory Commission (NERC) showed that customers under the Abuja Electricity Distribution Company (AEDC), covering the FCT, Niger, and parts of Nasarawa would receive an estimated N29.1 billion monthly.

In Lagos, those under Eko Electricity Distribution Company (EKEDC) would receive N22.42 billion, while Ikeja Electric (IE) customers get N26.68 billion.
South-South states under Port Harcourt Electricity Distribution Company (PHED) receive N14.84 billion, while Benin Electricity Distribution Company (BEDC) customers get N16.46 billion.

In the South East, Enugu Electricity Distribution Company (EEDC) customers benefit from N16.12 billion in subsidies.In the North, Jos Electricity Distribution Company (JED) receives N12.77 billion, Kaduna Electricity Distribution Company (KAEDC) gets N14.49 billion, Yola Electricity Distribution Company (YEDC) receives N8.63 billion, and Kano Electricity Distribution Company (KEDCO) gets N13.58 billion.

Urban customers under the Ibadan Electricity Distribution Company (IBEDC) receive N24.55 billion in subsidies to bring the overall monthly subsidy to N200 billion and N2.4 trillion yearly.