The Federal Government will spend N2.4 trillion on electricity subsidies in 2025, despite persistent power supply challenges and widespread outages affecting millions of Nigerians.
The subsidy, which remains at the same level as the previous year, will primarily benefit 30 percent of urban consumers, even as power generation struggles to meet demand.
Special Adviser to the President on Energy, Olu Verheijen, dismissed speculation about a possible electricity tariff increase, clarifying that her recent comments on power sector reforms were misinterpreted.
“This is a 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.
She further explained that the government incurs over N200 billion monthly on electricity subsidies, but much of the support disproportionately benefits Nigeria’s wealthiest 25 percent, rather than low-income households who need it most.
To address this, Verheijen stated that the government is moving toward a targeted subsidy system, ensuring that financial relief is directed toward vulnerable consumers.
“This approach will make electricity more affordable and accessible for millions of hardworking families,” she said.
Breakdown of Electricity Subsidy Distribution
According to the Nigerian Electricity Regulatory Commission (NERC), the subsidy allocation across electricity distribution companies (DisCos) is as follows:
- Abuja Electricity Distribution Company (AEDC) – N29.1 billion monthly
- Eko Electricity Distribution Company (EKEDC) – N22.42 billion
- Ikeja Electric (IE) – N26.68 billion
- Port Harcourt Electricity Distribution Company (PHED) – N14.84 billion
- Benin Electricity Distribution Company (BEDC) – N16.46 billion
- Enugu Electricity Distribution Company (EEDC) – N16.12 billion
- Jos Electricity Distribution Company (JED) – N12.77 billion
- Kaduna Electricity Distribution Company (KAEDC) – N14.49 billion
- Yola Electricity Distribution Company (YEDC) – N8.63 billion
- Kano Electricity Distribution Company (KEDCO) – N13.58 billion
- Ibadan Electricity Distribution Company (IBEDC) – N24.55 billion
These allocations bring the total monthly subsidy to N200 billion, amounting to N2.4 trillion annually.
Persistent Power Sector Challenges
Despite the massive subsidy expenditure, electricity generation remains unreliable, with frequent blackouts and technical inefficiencies plaguing the power sector. Distribution companies continue to report high losses, while millions of Nigerians face erratic power supply.
Verheijen outlined the government’s key priorities to improve the situation, including:
- Deployment of 7 million prepaid meters to eliminate estimated billing.
- Restructuring the electricity subsidy model to ensure benefits reach low-income households.
- Settling outstanding debts owed to power generation companies.
She reiterated that the government remains committed to power sector reforms, aimed at reducing outages, improving efficiency and ensuring a fair distribution of electricity costs.
As discussions around electricity pricing and subsidies continue, analysts caution that without structural reforms and investment in infrastructure, the power sector will remain dependent on government intervention, limiting long-term sustainability.
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