The Federal Government’s electricity subsidy obligation fell by N37.06 billion to N321.26 billion in the second quarter of 2026, following a decline in electricity offtake by distribution companies (DisCos).
The reduction represents a 10.34 per cent decline from the N358.32 billion recorded in the first quarter, according to the latest quarterly report by the Nigerian Electricity Regulatory Commission (NERC).
NERC attributed the lower subsidy requirement largely to a 3.40 per cent decline in electricity offtake by DisCos between Q1 and Q2.
The subsidy reflects the gap between the cost of supplying electricity and the tariffs paid by customers, with the Federal Government covering the shortfall where applicable.
The 11 DisCos incurred combined invoices of N647.72 billion from electricity generation companies (GenCos) in Q2, while the final Distribution Retailer Obligation-adjusted Nigerian Bulk Electricity Trading (NBET) invoice stood at N326.46 billion.
The government’s subsidy obligation stood at N108.40 billion in April, N112.93 billion in May and N99.93 billion in June.
Abuja DisCo recorded the highest GenCo invoice during the quarter at N106.67 billion, followed by Ikeja DisCo at N104.59 billion and Ibadan DisCo at N79.79 billion.
Eko DisCo recorded N75.39 billion, while Benin and Enugu DisCos recorded N55.03 billion and N52.52 billion, respectively.
Port Harcourt, Kaduna, Kano and Jos recorded GenCo invoices of N44.73 billion, N39.64 billion, N39.97 billion and N32.42 billion, respectively.
Yola DisCo recorded the lowest invoice at N16.96 billion, with a final DRO-adjusted NBET invoice of N2.85 billion.
The N321.26 billion subsidy represented 49.60 per cent of the total GenCo invoice, down from 51.95 per cent in Q1. This represents a 2.35 percentage-point reduction in the share of GenCo invoices covered by the subsidy.
DisCos’ remittance performance also weakened slightly during the quarter despite the decline in their electricity obligations.
NERC said the 11 DisCos remitted N306.62 billion against a DRO-adjusted NBET invoice of N326.46 billion, representing a 93.92 per cent remittance performance.
In Q1, DisCos remitted N312.48 billion against an NBET invoice of N331.40 billion, translating to a 94.29 per cent remittance rate.
The figures show that both the NBET invoice and the amount remitted declined between the two quarters.
The lower government subsidy obligation was therefore driven mainly by reduced electricity offtake rather than an improvement in DisCos’ remittance performance.
The reduction in subsidy also comes amid persistent billing challenges across the distribution segment.
The 11 DisCos recorded N201.90 billion in billing losses during Q2, with combined billing efficiency standing at 78.67 per cent.
NERC said the DisCos received electricity valued at N946.57 billion during the quarter but billed customers N744.67 billion.
The difference left N201.90 billion worth of electricity supplied but not billed, highlighting continued financial pressures across Nigeria’s electricity value chain.
The development comes as the Federal Government continues to focus on stabilising the electricity market.
Power Minister Joseph Tegbe recently said there was no immediate plan to increase electricity tariffs, with the administration instead prioritising improved electricity supply and stronger market discipline.
