Nigeria spent N458.75 billion on electricity subsidies in the third quarter despite the implementation of the Band ‘A’ tariff regime, according to data released by the Nigerian Electricity Regulatory Commission. The subsidy covered July to September and was attributed to the continued freeze on certain customer tariffs amid rising generation costs across the power sector.
During the same period, electricity Distribution Companies billed customers a total of N706.61 billion but were only able to collect N570.21 billion, reflecting ongoing challenges with revenue recovery. NERC reported marginal improvements in billing and collection efficiencies, although revenue shortfalls remain significant within the electricity value chain.
The commission disclosed that the total value of energy offtake by Discos during the quarter stood at N854.53 billion, with billing efficiency rising to 82.69 percent from 81.61 percent in the previous quarter. Collection efficiency also improved to 80.70 percent, up from 76.07 percent, even as cumulative billing losses reached N147.92 billion.
NERC explained that the subsidy resulted from the gap between cost-reflective tariffs and the approved end-user tariffs, which the federal government continues to cover. Although the subsidy fell by N55.59 billion compared to the previous quarter, it still accounted for over 58 percent of total invoices issued by power generation companies.
The report further revealed weak remittance by international bilateral customers, who paid just $7.125 million out of $18.69 million invoiced, while domestic bilateral customers recorded stronger payment performance. Energy accounting efficiency improved slightly to 83.80 percent, though losses persisted between energy received by Discos and energy billed to consumers.
NERC noted that inadequate metering, customer dissatisfaction, and unwillingness to pay bills remain key factors affecting collections. While Ikeja Disco achieved a 100 percent collection efficiency during the quarter, others recorded mixed performance, highlighting persistent disparities in operational efficiency across Nigeria’s electricity distribution network.
