The Federal Government spent ₦358.32 billion on electricity subsidies in the first quarter of 2026, according to the latest report released by the Nigerian Electricity Regulatory Commission.
In its First Quarter 2026 report published on Monday, the commission disclosed that the subsidy represented a 14.44 percent decrease from the ₦418.79 billion recorded in the fourth quarter of 2025.
According to NERC, the reduction was largely driven by lower electricity offtake by electricity distribution companies (DisCos), rather than improvements in cost recovery through tariffs.
The commission explained that electricity tariffs remain below cost-reflective levels, requiring the Federal Government to continue bridging the gap between the actual cost of electricity generation and the approved consumer tariff.
Under the existing Distribution Companies’ Remittance Obligation (DRO) framework, part of the amount owed by DisCos to the Nigerian Bulk Electricity Trading Plc is covered through government subsidies, while the Federal Ministry of Finance pays the remaining balance.
The report revealed that electricity generation companies invoiced the 11 DisCos a total of ₦689.72 billion during the quarter. Of that amount, only ₦331.40 billion was billed directly to the DisCos under the DRO arrangement, leaving the Federal Government to settle the outstanding ₦358.32 billion.
NERC noted that the subsidy accounted for 51.95 percent of the total generation invoice in the first quarter, slightly lower than the 52.03 percent recorded in the previous quarter.
The commission stated that the decline in subsidy obligations was primarily due to an 8.56 percent reduction in energy offtake by the DisCos between the fourth quarter of 2025 and the first quarter of 2026.
DisCos Recover ₦597.56bn From Customers
The report also showed that the 11 electricity distribution companies collected ₦597.56 billion out of the ₦756.93 billion billed to customers during the review period, translating to a collection efficiency of 78.95 percent. This was marginally below the 79.36 percent recorded in the previous quarter.
Among the distribution companies, Ikeja Electric posted the highest collection efficiency at 90.0 percent, followed by Eko DisCo with 89.64 percent. Benin DisCo recorded 85.16 percent, Port Harcourt DisCo achieved 81.22 percent, while Abuja DisCo posted 80.90 percent.
Kaduna DisCo recorded the weakest performance, with a collection efficiency of 45.81 percent.
NERC further noted that Jos, Kaduna, Kano, Port Harcourt and Benin DisCos improved their collection performances compared to the previous quarter, while the remaining six distribution companies experienced declines, with Enugu DisCo recording the sharpest drop.