The Federal Government incurred an electricity subsidy obligation of ₦679.58bn in the first half of 2026, representing a 35.27 per cent decline from the ₦1.05tn recorded in the corresponding period of 2025, the Nigerian Electricity Regulatory Commission has disclosed.
NERC made the disclosure in its Second Quarter 2026 Report, released on September 29, 2026, detailing the operational and commercial performance of Nigeria’s electricity supply industry.
The latest figure means the government continued to shoulder a substantial portion of the cost of electricity supplied to consumers amid the absence of cost-reflective tariffs across all distribution companies.
According to the report, the subsidy obligation stood at ₦321.26bn in the second quarter, compared with ₦358.32bn in the first quarter, representing a quarterly reduction of ₦37.06bn or 10.34 per cent.
NERC attributed the decline primarily to a 3.40 per cent reduction in energy offtake by electricity distribution companies between Q1 and Q2 2026.
The commission said the Q2 subsidy represented 49.60 per cent of the total invoices issued by electricity generation companies, compared with 51.95 per cent in the preceding quarter.
NERC said, “Due to the absence of cost reflective tariffs across all DisCos, the Government incurred a subsidy obligation of ₦321.26 billion.”
The development comes amid continuing efforts by the electricity regulator to improve the financial sustainability and reliability of the power sector.
In September, NERC introduced a revised framework requiring distribution companies to dedicate portions of their earned non-administrative operating expenditure to capital expenditure accounts for network rehabilitation, reinforcement and expansion.
The commission disclosed that the Distribution Companies received a DRO-adjusted invoice of ₦326.46bn from the Nigerian Bulk Electricity Trading Plc in Q2, against which they remitted ₦306.62bn.
This represented a 93.92 per cent remittance performance, slightly lower than the 94.29 per cent recorded in Q1, when the DisCos remitted ₦312.48bn out of an invoice of ₦331.40bn.
Seven distribution companies — Benin, Eko, Enugu, Ibadan, Ikeja, Port Harcourt and Yola — achieved 100 per cent remittance performance to NBET during the quarter.
However, three DisCos recorded remittance rates below 70 per cent.
Kano DisCo recorded 66.51 per cent, Jos 62.39 per cent, while Kaduna posted the lowest performance at 50.10 per cent.
NERC said Yola, Ibadan, Kaduna and Enugu improved their remittance performance compared with Q1, while Kano, Jos and Abuja recorded declines.
Kano suffered the sharpest quarter-on-quarter decline, dropping by 18.66 percentage points.
The report also showed that the DisCos collectively remitted ₦78.82bn against ₦83.92bn invoiced by the Market Operator for energy transmission and administrative services during the quarter.
The 93.92 per cent remittance rate represented a marginal improvement over the 93.28 per cent recorded in Q1.
While most of the distribution companies recorded full remittance performance, six fell short of 100 per cent.
Abuja recorded 99.93 per cent, Yola 99.34 per cent and Ibadan 98.73 per cent, while Kano, Jos and Kaduna recorded 69.72 per cent, 67.09 per cent and 57.86 per cent respectively.
