WorldStage– Nigeria’s electricity sector remained heavily dependent on government intervention in 2025, as the Federal Government spent N1.92 trillion on tariff subsidies amid persistent metering gaps, high industry losses and weak revenue collection.
The latest data from the Nigerian Electricity Regulatory Commission (NERC) 2025 Annual Report showed that more than 5.1 million electricity customers remained without functional meters, leaving a significant portion of households and businesses exposed to estimated billing.
NERC said the country had 12.16 million registered electricity customers at the end of 2025, but only 57.27 percent were metered, despite the installation of nearly one million new meters during the year.
The regulator identified the metering deficit as one of the major structural challenges worsening the financial position of the Nigerian Electricity Supply Industry (NESI).
It said the absence of accurate metering continued to encourage energy theft, billing disputes and revenue leakages across the distribution segment.
According to the report, aggregate technical, commercial and collection (ATC&C) losses increased to 37.03 percent in 2025, significantly above NERC’s regulatory target of 20.54 percent.
The financial implications were substantial.
Of the N3.68 trillion worth of electricity supplied to electricity distribution companies (DisCos) during the year, only N2.98 trillion was billed to customers, while actual collections amounted to N2.31 trillion.
The revenue shortfall further weakened the ability of DisCos to meet their obligations to other players in the electricity value chain.
NERC reported that the Nigerian Bulk Electricity Trading Plc (NBET) recorded an N89.58 billion shortfall in 2025, reflecting the liquidity challenges running through the sector.
The Federal Government consequently absorbed a substantial portion of the funding gap through tariff subsidies, paying N1.92 trillion during the year to bridge the difference between the cost-reflective tariff and the rates paid by electricity consumers.
The subsidy burden comes despite Nigeria maintaining relatively low electricity prices compared with the wider West African market.
NERC put the average electricity tariff at about $0.08 per kilowatt-hour in Nigeria, compared with a regional average of approximately $0.19/kWh.
However, the low tariff regime, combined with inadequate metering and high technical and commercial losses, has continued to place pressure on the finances of the electricity market.
The report indicated that the problem extends beyond revenue collection to the utilisation of available generation capacity.
More than 60 percent of Nigeria’s 5,398 megawatts of grid capacity remained idle, with liquidity constraints and distribution bottlenecks limiting the amount of electricity that could be effectively delivered to consumers.
The situation has created a cycle in which consumers without meters are exposed to estimated bills, potentially discouraging payment; DisCos subsequently suffer revenue losses, while their inability to recover sufficient revenue constrains payments across the electricity supply chain.
Ultimately, the Federal Government is required to provide additional funding to sustain the system.
NERC’s data therefore highlights the metering deficit as more than a consumer-protection issue, but a major financial constraint capable of undermining the sustainability of the entire electricity market.
Until the metering gap, commercial losses and liquidity constraints are substantially addressed, Nigeria’s power sector could remain dependent on government subsidies, while consumers continue to contend with unreliable supply and disputes over electricity bills.
