Federal Government Increases Subsidy for Electricity by 275% in Q2 2023

by Ikem Emmanuel

The Nigerian Electricity Regulatory Commission (NERC) has revealed that the Federal Government has substantially increased its subsidy for electricity consumption in the second quarter of 2023. The government disbursed N135.23 billion to bridge the revenue generation gap in the power sector during this period. This figure signifies a remarkable 275 percent surge compared to the N36 billion spent in the first quarter of the same year.

The report outlines the government’s subsidy obligation for the second quarter of 2023, which has seen a significant boost from the previous quarter. It stated, “The government incurred a subsidy obligation of N135.23 billion in 2023/Q2, which is an increase of N99.21 billion, 275 percent compared to the N36.02 billion incurred in 2023/Q1.”

The primary reason behind this substantial increase in subsidy lies in the absence of cost-reflective tariffs across all distribution companies. To ensure that electricity remains accessible and affordable to Nigerian citizens, the government has chosen to provide this financial support.

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Furthermore, the report noted that the subsidy surge during this period was partly due to the government’s policy of harmonizing the exchange rate. This policy shift has impacted the cost structure within the power sector, prompting an adjustment in the subsidy amount to maintain stable electricity prices for consumers.


On average, the government’s subsidy obligation per month amounted to N45.08 billion in the second quarter of 2023. This highlights the government’s commitment to ensuring that Nigerians continue to have access to electricity without facing an excessive financial burden.

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