FG says electricity subsidy gulped N3trn in 31 months

The federal government says it spent N3.14 trillion on electricity subsidy between June 2023 and December 2025 to cushion consumers from the impact of electricity tariff increases.

The expenditure was part of N30.64 trillion in incremental spending pressures incurred by the federal government during the period

According to figures released by the ministry of finance, the expenditure was part of N30.64 trillion in incremental spending pressures incurred by the federal government during the period.

The figures are contained in the economic reform scorecard published following a presentation by Taiwo Oyedele, minister of finance and coordinating minister of the economy, on Wednesday.

The government said the subsidy helped cushion consumers from the impact of higher electricity tariffs amid reforms in the power sector.

The subsidy bill stood at N177 billion in 2023 before rising by more than 740 percent to N1.48 trillion in 2024.

As of December 2025, the subsidy expenditure stood at N1.47 trillion, representing a 1.14 percent decline from the previous year.

The N3.14 trillion electricity subsidy was one of the major expenditure pressures recorded by the federal government during the period.

Others included N9.39 trillion spent on wage adjustments, N9.37 trillion on the exchange-rate impact of external debt servicing and N6.47 trillion on strategic infrastructure.

The ministry said the additional expenditure pressures were partly financed with N20.4 trillion in incremental resources available to the federal government during the period.

The resources comprised N5.43 trillion representing the federal government’s share of estimated subsidy savings, N3.12 trillion in other incremental revenues and N11.85 trillion in incremental borrowing.

However, the government said the additional resources were insufficient to cover the spending pressures, leaving a funding gap of N10.24 trillion to be absorbed from the existing revenue base.

The disclosure comes as the government plans to gradually phase out electricity subsidy payments from 2027.

In July, Joseph Tegbe, minister of power, said there were no plans to increase electricity tariffs, adding that the government would gradually remove subsidies next year without depriving Nigerians of the benefits they currently receive.

The Nigerian Electricity Regulatory Commission (NERC) had increased electricity tariffs for customers under Band A in April 2024.

Under the revised tariff, band A customers, who are expected to receive at least 20 hours of electricity supply daily, were moved from N66 to N225 per kilowatt-hour.

NERC had said the tariff review was expected to reducethe government’s subsidy burden by about N1.14 trillion in 2024.. (TheCable)