FG incurs N358.3bn electricity subsidy in Q1 — NERC

Nigeria's Federal Government incurred electricity tariff subsidies totaling N358.32 billion in the first quarter of 2026, according to a report by the Nigerian Electricity Regulatory Commission (NERC). This figure reflects the government's ongoing efforts to bridge the gap between cost-reflective tariffs and the actual rates paid by consumers.

The subsidy amount marked a decrease of N60.46 billion, or 14.44 percent, compared to the N418.79 billion recorded in the fourth quarter of 2025. NERC attributed this reduction primarily to a decline in electricity offtake by distribution companies (DisCos), rather than improvements in tariff collection efficiency.

Under the current framework, the government covers the difference between the cost of electricity generation and approved consumer tariffs. This subsidy is applied to the generation costs payable by DisCos to the Nigerian Bulk Electricity Trading Plc, with the government directly settling the remaining amount with the Federal Ministry of Finance.

During the quarter, electricity generation companies invoiced N689.72 billion for energy supplied to the 11 DisCos. Of this amount, N331.40 billion was billed to the DisCos, leaving the Federal Government responsible for the remaining N358.32 billion. This subsidy constituted 51.95 percent of the total generation invoice for the period.

The report also highlighted that electricity distribution companies collected N597.56 billion out of the N756.93 billion billed to customers, achieving a collection efficiency of 78.95 percent. This is a slight decrease from the 79.36 percent efficiency recorded in the previous quarter. Ikeja Electricity Distribution Company led with the highest collection efficiency at 90.0 percent, while Kaduna DisCo had the lowest at 45.81 percent.