Band A electricity consumers effectively contributed N101bn towards subsidising customers in lower tariff bands in 2025, according to a report by ZKJ Energy Partner Limited.
The report found that the Federal Government’s N1.93tn electricity subsidy was largely enjoyed by consumers in Bands B and C, who together accounted for about 70 per cent of the total support.
Band B consumers received an estimated N741bn, representing 38 per cent of the subsidy, while Band C accounted for N609bn, or 32 per cent.
Band D consumers received N452bn, representing 24 per cent, while Band E accounted for N227bn, or 12 per cent.
Unlike the other categories, Band A consumers did not receive a subsidy. The report said their tariffs were slightly above the estimated cost of supplying electricity, resulting in an estimated N101bn surplus that helped fund the lower bands.
Band A customers are guaranteed a minimum of 20 hours of electricity supply daily.
According to the report, the total subsidy requirement would have reached about N2.03tn if the Band A contribution had not been taken into account. The N101bn offset reduced the figure to the N1.93tn net subsidy recorded for 2025.
The analysis also found that consumers in Bands B to E paid between N16 and N22 per kilowatt-hour below estimated generation costs, before transmission and distribution expenses and network losses were considered.
The report said the subsidy structure did not necessarily direct the largest share of government support to the poorest consumers because Bands D and E use significantly less electricity than the higher-consumption categories.
It further pointed to the continued financial burden of electricity subsidies, citing Nigerian Electricity Regulatory Commission data showing that the Federal Government provided N358.32bn in tariff support during the first quarter of 2026. The amount represented 51.95 per cent of total generation costs.
ZKJ Energy Partner also highlighted differences in the performance of electricity distribution companies. It cited estimated losses of 44 per cent at Yola Electricity Distribution Company compared with about 14 per cent at Ikeja Electric.
The report argued that a uniform tariff structure gives consumers in poorly performing networks little incentive to demand improved efficiency.
It recommended increased investment in transmission and distribution infrastructure, reliable gas supplies for power generation and stronger measures to reduce technical, commercial and collection losses.
The firm also called for performance-based regulation of distribution companies, stressing that additional power generation would have limited impact if electricity could not be efficiently transmitted and distributed to consumers.
