FG Spends N471bn on Electricity Subsidy in Q4 2024 as DisCo Collections Rise
Samuel Mobolaji
The Federal Government incurred a subsidy obligation of N471.69 billion on electricity in the fourth quarter (Q4) of 2024, reflecting a continued burden on public finances, according to the Nigerian Electricity Regulatory Commission (NERC).
In its latest quarterly report, NERC disclosed that the subsidy bill rose by N7.5 billion (1.63 per cent) from the N464.12 billion recorded in Q3. The increase was attributed to the government’s decision to freeze customer tariffs despite rising cost-reflective tariffs.
“The government incurred a subsidy obligation of N471.69 billion, covering 56.65 per cent of the total Nigerian Bulk Electricity Trading (NBET) invoice in Q4 2024,” the report stated. It added that the subsidy was applied to generation costs paid by distribution companies (DisCos) through NBET at source.
Despite the subsidy expenditure, electricity distribution companies saw an improvement in revenue collection. DisCos collected N509.84 billion out of the N658.4 billion billed to customers in Q4, achieving a collection efficiency of 77.44 per cent. This marked an increase from the 74.55 per cent recorded in Q3 when N466.69 billion was collected from N626.02 billion billed.
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Among the DisCos, Eko DisCo led in collection efficiency with 90 per cent, followed by Ikeja DisCo at 82.63 per cent. In contrast, Jos DisCo recorded the lowest efficiency at 49.68 per cent. NERC noted that eight DisCos improved their collection efficiency in Q4, with Yola and Kano DisCos achieving the most significant gains, while Jos and Abuja DisCos experienced the sharpest declines.
The report underscores the government’s growing financial obligation to sustain electricity subsidies amid a push for tariff reforms and improved sector efficiency.
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