Amid Persistent Blackouts FG spends N358bn on electricity subsidy in just three months — NERC Report

The Federal Government spent ₦358.32 billion on electricity subsidies in the first quarter of 2026, even as Nigerians continued to grapple with declining power supply and repeated national grid disturbances, the Nigerian Electricity Regulatory Commission (NERC) has revealed.

According to NERC’s First Quarter 2026 report, the subsidy bill arose from the government’s decision to retain electricity tariffs at the July 2024 rates rather than implement cost-reflective pricing across electricity distribution companies (DisCos).

The commission disclosed that subsidy payments amounted to ₦126.48 billion in January, ₦116.34 billion in February and ₦115.50 billion in March, averaging more than ₦119 billion each month.

“It is important to note that due to the absence of cost-reflective tariffs across all DisCos, the government incurred a subsidy obligation of ₦358.32 billion. This represents a ₦60.46 billion (14.44 per cent) reduction compared to the ₦418.79 billion recorded in the fourth quarter of 2025,” the report stated.

NERC explained that the subsidy accounted for 51.95 per cent of the total invoices issued to electricity generation companies (GenCos), adding that the reduction from the previous quarter was largely due to lower electricity offtake by distribution companies.

“The government subsidy accounted for 51.95 per cent of the total GenCo invoice. The key driver of this reduction is the decline in energy offtake by the DisCos, which fell by 8.56 per cent between the fourth quarter of 2025 and the first quarter of 2026,” the commission said.

The report showed that electricity generation during the quarter attracted invoices totalling ₦689.72 billion. However, distribution companies were billed only ₦331.40 billion, with the Federal Government paying the remaining ₦358.32 billion.

“The NBET invoice payable by the DisCos for the first quarter of 2026 was only ₦331.40 billion because the Federal Government assumed responsibility for approximately 52 per cent (₦358.32 billion) of the total generation costs,” NERC explained.

The regulator also cautioned that the current subsidy framework may become increasingly difficult to sustain.

“The open-ended nature of the subsidy exposes the Federal Government to indeterminate subsidy obligations due to volumetric risk and changes in generation costs,” the report warned.

Despite the significant public expenditure, electricity supply deteriorated during the period. Average available generation capacity declined by 17.45 per cent to 4,457.96 megawatts (MW), while total electricity generated fell by 9.64 per cent to 8,883.47 gigawatt-hours (GWh).

The commission further reported two major disturbances on the national grid in January that resulted in widespread power outages across the country.

“A total collapse occurred on 23 January 2026, while a partial collapse of the grid occurred on 27 January 2026,” the report stated.

The latest figures underscore the persistent challenges facing Nigeria’s electricity sector, where billions of naira continue to be spent on subsidies even as consumers endure unreliable power supply and recurring grid failures.