Government Cuts Electricity Subsidy by N37 Billion in Q2 2026

In the second quarter of 2026, the Federal Government's electricity subsidy obligation fell by N37.06 billion to N321.26 billion, according to the Nigerian Electricity Regulatory Commission (NERC). This represents a 10.34% decline from the N358.32 billion recorded in the first quarter.

The reduction was primarily due to a 3.40% decrease in electricity offtake by distribution companies (DisCos). The subsidy exists because electricity tariffs are below the cost of supplying power, necessitating government coverage of the difference.

During Q2, the 11 DisCos incurred a total of N647.72 billion in invoices from electricity generation companies (GenCos), with the final Distribution Retailer Obligation-adjusted Nigerian Bulk Electricity Trading (NBET) invoice at N326.46 billion. The government's monthly subsidy obligations were N108.40 billion in April, N112.93 billion in May, and N99.93 billion in June.

Despite the subsidy reduction, DisCos' remittance performance against their NBET invoices slightly weakened, with a remittance of N306.62 billion against the N326.46 billion invoice, resulting in a 93.92% performance. Minister of Power Joseph Tegbe stated there are no immediate plans to increase electricity tariffs, focusing instead on improving supply and market discipline.