FG INCURS N1.95 TRILLION ELECTRICITY SUBSIDY SHORTFALL IN 2024 AS DISCO REVENUES SURGE
Read Time:2 Minute, 5 Second
By Aishat Momoh. O.
The Federal Government of Nigeria incurred a total electricity subsidy shortfall of N1.95 trillion in 2024 due to non-cost-reflective tariffs, according to the Nigerian Electricity Regulatory Commission (NERC) in its newly released 2024 Annual Report.
The shortfall arose from the government’s commitment to bridge the gap between the actual cost of power and the approved tariffs charged to consumers, NERC stated. However, the report did not clarify whether the full subsidy amount had been paid by the government.
A breakdown of the subsidy trend shows that N633 billion was incurred in Q1 2024, N380 billion in Q2, N464 billion in Q3, and N471 billion in Q4.
Despite the subsidy burden, Distribution Companies (Discos) posted a sharp 40% year-on-year revenue increase in April 2025. The sector recorded a total billing of N257.57 billion, with N199.85 billion collected, marking a record collection efficiency of 77.6%, up from 71.1% in March.
This revenue surge occurred despite a 9.2% drop in energy received by Discos, which stood at 2,622.46 gigawatt-hours (GWh) in April. Of this, 2,184.61 GWh was billed to customers a 5.8% decline from the previous month. The increase in revenue was largely attributed to higher end-user tariffs, particularly for Band A customers, who now pay N209/kWh, up from N66/kWh following the April 2024 tariff hike.
The tariff adjustment aimed to reduce the government’s subsidy burden, enhance liquidity in the power sector, and attract private investment.
From January to April 2025, the sector billed N1.02 trillion, with an under-recovery of N260 billion, indicating persistent challenges in consumer payment, energy access, and uneven power supply.
The sector continues to grapple with high Aggregate Technical, Commercial, and Collection (ATC\&C) losses, which stood at 39.6% in Q1 2025 nearly double the 20.5% benchmark set by the Multi-Year Tariff Order (MYTO). These losses are estimated to have cost the industry ₦200.5 billion.
In April, Eko Disco led in performance with 100% revenue collection amounting to N38.7 billion, a 28.82% increase. Ikeja Electric followed with N34.68 billion (up 6.1%), while Abuja Disco collected N30.27 billion, representing a 4.3% drop.
Despite improvements in revenue collection and tariff reform, Nigeria’s power sector remains under pressure from rising losses, low energy delivery, and a mounting subsidy burden.
Happy
0 %
Sad
0 %
Excited
0 %
Sleepy
0 %
Angry
0 %
Surprise
0 %
0
0