THE Federal Government’s financial burden from electricity subsidies declined in the first half (H1) of 2026, even as the power sector continued to operate below cost-reflective tariff levels.
The Nigerian Electricity Regulatory Commission (NERC) reported a total subsidy obligation of N679.58 billion for the first six months of the year, representing a 35.27 percent reduction from the N1.05 trillion recorded in the corresponding period of 2025.
The figure was contained in NERC’s report for the second quarter (Q2) of 2026.
The commission said the government’s subsidy obligation stood at N321.26 billion in Q2, compared with N358.32 billion in the first quarter (Q1).
NERC attributed the quarter-on-quarter reduction largely to lower electricity offtake by distribution companies (DisCos), which fell by 3.40 percent during the period.
Subsidy still covers nearly half of generation invoices
Despite the decline in the government’s subsidy burden, the cost of maintaining electricity tariffs below cost-reflective levels remained substantial.
NERC said the Q2 subsidy represented 49.60 percent of the total invoices issued by electricity generation companies (GenCos), compared with 51.95 percent in Q1.
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The figures illustrate the continuing gap between the cost of supplying electricity and the revenue recovered through tariffs paid by consumers.
NERC said the reduction in subsidy obligations was also reflected in the amount billed by the Nigerian Bulk Electricity Trading Company (NBET) to DisCos.
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The commission reported that the adjusted NBET invoice to the DisCos stood at N326.46 billion in Q2, against total remittances of N306.62 billion.
This represented a 93.92 percent remittance performance during the quarter. In Q1, NBET had issued an adjusted invoice of N331.40 billion, against remittances of N312.48 billion, translating to a 94.29 percent payment performance.
Seven DisCos fully met NBET obligations
NERC said 7 electricity distribution companies achieved full remittance performance to NBET during Q2.
The companies were Benin, Eko, Enugu, Ibadan, Ikeja, Port Harcourt and Yola DisCos. However, payment performance was considerably weaker among some other distributors.
Kano DisCo recorded a 66.51 percent remittance rate, while Jos and Kaduna recorded 62.39 percent and 50.10 percent, respectively.
READ ALSO: https://www.thecable.ng/nerc-electricity-subsidy-gulped-n679bn-in-h1-2026-down-by-35/
NERC said Yola, Ibadan, Kaduna and Enugu recorded improvements in their remittance performance compared with the previous quarter.
Yola posted the largest improvement at 16.45 percentage points, followed by Ibadan at 6.38 percentage points, Kaduna at 5.52 percentage points and Enugu at 0.68 percentage points.
By contrast, Kano recorded an 18.66 percentage-point decline, while Jos and Abuja recorded declines of 4.71 and 1.02 percentage points, respectively.
DisCos remit N78.82bn to market operator
The commission also disclosed that DisCos collectively remitted N78.82 billion against N83.92 billion invoiced by the Market Operator for transmission and administrative services during Q2.
The payments represented a 93.92 percent remittance performance and an improvement from the 93.28 percent recorded in Q1.
In Q1, DisCos had remitted N83.74 billion against an invoice of N89.78 billion.
NERC said most DisCos achieved full remittance performance to the Market Operator during Q2, with Abuja, Yola, Ibadan, Kano, Jos and Kaduna recording less than 100 percent.
The disaggregated figures showed Abuja with 99.93 percent remittance performance, followed by Yola at 99.34 percent and Ibadan at 98.73 percent.
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Kano recorded 69.72 percent, while Jos and Kaduna posted 67.09 percent and 57.86 percent, respectively.
Kano’s payment performance declined by 14.97 percentage points from the previous quarter, while Jos recorded a 5.32 percentage-point reduction.
The figures point to continued payment challenges within parts of Nigeria’s electricity market, even as overall remittance performance remained above 90 percent during the quarter.
NERC’s latest data also show that the government continues to shoulder a substantial portion of the cost of electricity supplied to consumers, despite the decline in subsidy obligations compared with the previous year.
However, any attempt to remove the subsidies may be resisted by Nigerians who are yet to recover from the removal of petrol and foreign exchange subsidies.
