Electricity subsidy falls 35% to N679bn in H1’26

The Federal Government’s electricity subsidy bill fell 35.27 percent to N679.58 billion in the first half of 2026 from N1.05 trillion recorded in the corresponding period of 2025, as lower electricity off-take by distribution companies helped reduce the cost of keeping tariffs below cost-reflective levels.

The Nigerian Electricity Regulatory Commission (NERC) stated in its Q2 2026 report that the government’s subsidy obligation stood at N321.26 billion in the second quarter, down by N37.06 billion, or 10.34 percent, from N358.32 billion recorded in Q1.

The commission attributed the quarter-on-quarter decline primarily to a 3.40 percent reduction in electricity off-take by distribution companies (DisCos).

“It is important to note that due to the absence of cost reflective tariffs across all DisCos, the government incurred a subsidy obligation of N321.26 billion,” NERC said, adding that the amount represented a reduction of N37.06 billion, or 10.34 percent, compared with Q1.

The Q2 subsidy represented 49.60 percent of the total invoices issued by electricity generation companies (GenCos), compared with 51.95 percent in Q1.

Meanwhile, NERC said DisCos remitted N306.62 billion out of the N326.46 billion DRO-adjusted invoice issued by the Nigerian Bulk Electricity Trading Plc (NBET) in Q2, representing 93.92 percent remittance performance.

This was slightly lower than the 94.29 percent recorded in Q1, when DisCos remitted N312.48 billion out of an N331.40 billion invoice.

Seven DisCos – Benin, Eko, Enugu, Ibadan, Ikeja, Port Harcourt and Yola – achieved 100 percent remittance performance to NBET during the quarter.

However, Kano, Jos and Kaduna DisCos recorded remittance rates below 70 percent, at 66.51 percent, 62.39 percent and 50.10 percent, respectively.

On a quarter-on-quarter basis, Yola, Ibadan, Kaduna and Enugu DisCos improved their remittance performance by 16.45 percentage points, 6.38 percentage points, 5.52 percentage points and 0.68 percentage points, respectively

In contrast, Kano, Jos and Abuja recorded declines of 18.66 percentage points, 4.71 percentage points and 1.02 percentage points, respectively.

NERC also disclosed that DisCos remitted N78.82 billion against N83.92 billion invoiced by the Market Operator (MO) for energy transmission and administrative services in Q2.

The remittance represented 93.92 percent of the amount invoiced, an improvement of 0.64 percentage points from the 93.28 percent recorded in Q1, when DisCos remitted N83.74 billion against an N89.78 billion invoice.