The Federal Government of Nigeria incurred N679.58 billion in electricity subsidy obligations during the first half of 2026. This represents a significant decline of 35.27% from the N1.05 trillion recorded in the corresponding period of 2025. The Nigerian Electricity Regulatory Commission (NERC) disclosed this information in its second-quarter 2026 report. The report highlights a continued decline in the government's subsidy obligation between the first and second quarters of the year.
According to the NERC, the Federal Government's electricity subsidy obligation stood at N321.26 billion in the second quarter of 2026. This is compared to N358.32 billion in the first quarter, indicating a reduction of N37.06 billion or 10.34%. The commission attributes the decline to the absence of cost-reflective tariffs across all Distribution Companies (DisCos). The subsidy recorded in the second quarter accounted for 49.60% of the total invoices issued by electricity generation companies.
The NERC report also provides details on payments made by distribution companies to the Nigerian Bulk Electricity Trading Plc (NBET). In the second quarter of 2026, the DRO-adjusted invoice from NBET to the DisCos was N326.46 billion. The total remittance made was N306.62 billion, which translates to 93.92% remittance performance. This is a slight decrease from the 94.29% remittance performance recorded in the first quarter.
Seven electricity distribution companies achieved full remittance performance to NBET during the second quarter. These companies include Benin, Eko, Enugu, Ibadan, Ikeja, Port Harcourt, and Yola DisCos. However, significant variations were observed among the remaining distribution companies. Kano, Jos, and Kaduna recorded remittance rates below 70% during the quarter. Kano DisCo achieved a remittance rate of 66.51%, while Jos and Kaduna recorded 62.39% and 50.10%, respectively.
A quarter-on-quarter analysis showed that Yola, Ibadan, Kaduna, and Enugu DisCos recorded improvements in remittance performance to NBET. In contrast, Kano, Jos, and Abuja DisCos recorded decreases in remittance performance in the second quarter compared to the first quarter. The market operator also billed the DisCos for electricity transmission and administrative services during the second quarter.
In the second quarter of 2026, DisCos made a total remittance of N78.82 billion against the cumulative invoice of N83.92 billion issued by the market operator. This represents a 93.92% remittance performance, marking a slight improvement compared to the first quarter. The performance of individual distribution companies varied in their payments to the market operator.
The latest figures highlight the continued financial burden associated with maintaining electricity supply at tariffs that do not fully reflect the cost of service. The reduction in the Federal Government's subsidy obligation compared to both the preceding quarter and the first half of 2025 is a positive trend. However, the variations in remittance performance among distribution companies remain a concern.
Key points
- - Nigeria's electricity subsidy dropped to N679.58 billion in the first half of 2026. - The subsidy recorded in the second quarter accounted for 49.60% of the total invoices issued by electricity generation companies. - Seven electricity distribution companies achieved full remittance performance to NBET during the second quarter.
