• DisCos worsen losses, fail to remit N167b
• 38 Nigerians killed by power infrastructure
Nigeria’s electricity market continues to be weighed down by subsidy payments and inefficiencies as taxpayers incurred N514.35 billion to subsidise electricity consumption in just three months, largely driven by high demand from residents of Lagos and Abuja.
While Band A customers are currently overpaying electricity bills by about N50 per kilowatt hour to bring each KWh to over N200, consumers under Band B to E are subsidised by taxpayers and those on Band A. The taxpayer’s component, which should have been paid to the market, had been accumulating and has soared above N2 trillion under the President Tinubu government alone.
The latest market performance report for the second quarter of 2025 (Q2’25) released yesterday by the Nigerian Electricity Regulatory Commission (NERC) revealed that the subsidy, though N22.04 billion lower than in the previous quarter (Q1’25), still accounted for 59.6 per cent of the total generation cost across the 11 electricity distribution companies (DisCos). This marked a slight increase of 0.44 percentage points from the previous quarter’s 59.16 per cent share.
The data also showed that Nigerians living in major cities like Lagos and Abuja are the primary beneficiaries of the subsidy scheme, as Lagos alone accounted for N248 billion, almost half of the subsidy claim, while Abuja stood at N133 billion.
The report attributed the persistent subsidy burden to the absence of cost-reflective tariffs, despite rising generation costs. While the actual generation cost per kilowatt-hour (N/kWh) rose by 0.59 per cent, the end-user tariffs approved by the Nigerian Electricity Regulatory Commission (NERC) remained unchanged.
Among the DisCos, Ikeja DisCo recorded the highest total generation company (GenCo) invoice at N134.23 billion, closely followed by Abuja DisCo with N133.75 billion, and Eko DisCo with N114.30 billion. Ibadan DisCo ranked next with N101.66 billion, while the lowest invoices were seen in Jos (N43.16 billion), Kaduna (N46.91 billion), and Kano (N51.71 billion).
However, after applying the Final Declared Revenue Obligation (DRO) adjustment, which accounts for government subsidy and tariff shortfall, Ikeja still had the highest adjusted obligation at N61.28 billion, followed by Abuja (N59.17 billion) and Eko (N53.19 billion). Kaduna and Jos DisCos, on the other hand, had the smallest adjusted obligations at N14.60 billion and N16.01 billion, respectively.
The total energy supplied by the grid during the period came from 28 power plants, comprising five hydro stations, two steam plants, 19 open-cycle gas turbines (OCGT), and two combined-cycle gas turbines (CCGT). The average available generation capacity rose marginally by 0.54 per cent to 5,395.72 megawatts (MW), compared to 5,366.88MW in Q1’25.
Despite this modest improvement in capacity, inefficiencies within the distribution segment remain severe. The Aggregate Technical, Commercial and Collection (ATC&C) losses, which measure the gap between energy received, billed, and paid for, stood at 37.92 per cent, comprising 18.39 per cent technical and commercial losses and 23.93 per cent collection losses.
Although this represented a slight improvement from Q1’25’s 39.61 per cent, it was still 17.38 percentage points above the regulatory target of 20.54 per cent, translating to a cumulative revenue loss of N158.05 billion across all DisCos.
With the exception of Eko DisCo, none of the companies met their loss-reduction targets. Kaduna DisCo performed worst, recording an actual ATC&C loss of 70.98 per cent compared to a target of 21.32 per cent.
In terms of remittance, the total upstream invoice payable by all DisCos during Q2’25 stood at N417.35 billion, including N348.66 billion owed to the Nigerian Bulk Electricity Trading Plc (NBET) for energy procurement, and N68.68 billion owed to the Market Operator (MO) for transmission and administrative services.
