Nigeria’s electricity subsidy obligation fell by 35.27 per cent to ₦679.58 billion in the first half of 2026, according to the Nigerian Electricity Regulatory Commission’s second-quarter report. The figure compares with about ₦1.05 trillion recorded in the same period of 2025.
The reduction reflects a decline in the government’s subsidy obligation as electricity tariffs remain below cost-reflective levels across the distribution network. NERC said the subsidy obligation stood at ₦321.26 billion in the second quarter, down from ₦358.32 billion in the first quarter. That represents a reduction of ₦37.06 billion, or 10.34 per cent.
According to NERC, the lower subsidy was driven mainly by a 3.40 per cent decline in electricity off-take by distribution companies, or DisCos, between the first and second quarters. The Q2 subsidy represented 49.60 per cent of the total invoices issued by generating companies, compared with 51.95 per cent in Q1.
Meanwhile, DisCos remitted ₦306.62 billion out of ₦326.46 billion invoiced by the Nigerian Bulk Electricity Trading Plc in Q2. This translated to a 93.92 per cent remittance performance, slightly below the 94.29 per cent recorded in Q1. Seven DisCos — Benin, Eko, Enugu, Ibadan, Ikeja, Port Harcourt and Yola — achieved full remittance during the quarter.
However, performance remained uneven across the sector. Kano DisCo recorded 66.51 per cent, Jos 62.39 per cent and Kaduna 50.10 per cent in remittance performance. NERC has continued to emphasise stronger market compliance, financial sustainability and investment as key to improving Nigeria’s electricity supply industry.
The lower subsidy obligation could reduce pressure on government finances, but it does not by itself mean that electricity costs or supply challenges have been resolved. NERC’s figures underline the continuing gap between the cost of electricity supply, consumer tariffs and the financial obligations of market participants.
