Tinubu Gov’t Pays ₦358 Billion Electricity Subsidy Amid Weak DisCos Collections

The Federal Government incurred ₦358.32 billion as an electricity tariff subsidy in the first quarter of 2026, the Nigerian Electricity Regulatory Commission (NERC) has said.

Naija News reports that NERC disclosed this in its First Quarter 2026 report released on Monday, July 6, noting that the amount represented a 14.44 per cent decline from the ₦418.79 billion recorded in the fourth quarter of 2025.

The commission, however, attributed the drop mainly to a reduction in electricity offtake by distribution companies, rather than any significant improvement in tariff recovery.

According to NERC, electricity tariffs remain below cost-reflective levels, making it necessary for the government to continue paying the difference between the actual cost of generation and the approved rates charged to consumers.

Under the current Distribution Companies’ Remittance Obligation framework, part of the generation costs payable by DisCos to the Nigerian Bulk Electricity Trading Plc is covered through government subsidy, while the Federal Ministry of Finance settles the outstanding balance.

The report showed that generation companies invoiced a total of ₦689.72bn for electricity supplied to the 11 DisCos during the quarter.

However, only ₦331.40 billion was billed to the DisCos under the DRO arrangement, leaving the Federal Government to cover the balance of ₦358.32 billion.

NERC said the subsidy accounted for 51.95 per cent of the total generation invoice in the quarter, compared with 52.03 per cent recorded in the preceding quarter.

“The key driver of this reduction in the Federal Government’s subsidy obligation is the decrease in energy offtake by the DisCos by 8.56 per cent between the fourth quarter of 2025 and the first quarter of 2026,” the commission stated.

The report further showed that the 11 electricity distribution companies collected ₦597.56bn out of the ₦756.93 billion billed to customers in the first quarter.

This represented a collection efficiency of 78.95 per cent, slightly lower than the 79.36 per cent recorded in the fourth quarter of 2025.

Ikeja Electric recorded the highest collection efficiency at 90.0 per cent, followed by Eko DisCo with 89.64 per cent.

Benin DisCo recorded 85.16 per cent, Port Harcourt DisCo posted 81.22 per cent, while Abuja DisCo recorded 80.90 per cent.

Kaduna DisCo had the lowest collection efficiency in the period under review, with 45.81 per cent.

NERC noted that Jos, Kaduna, Kano, Port Harcourt and Benin DisCos improved their collection efficiencies compared with the previous quarter.

However, the remaining six DisCos recorded declines, with Enugu DisCo posting the sharpest drop.