FG Electricity Subsidy Drops 35% to N679bn in H1

​The Federal Government’s financial burden on electricity subsidies experienced a significant downward turn, dropping by 35.27 percent to N679.58 billion in the first half of 2026, down from the N1.05 trillion recorded during the same period in 2025.

​According to the Nigerian Electricity Regulatory Commission (NERC) in its Q2 report, the contraction was largely driven by a reduction in electricity off-take by power distribution companies (DisCos), which helped curtail the fiscal cost of keeping consumer tariffs below cost-reflective levels.

​The government’s subsidy obligation stood at N321.26 billion for the second quarter (Q2), marking a 10.34 percent decline (N37.06 billion) compared to the N358.32 billion posted in the first quarter (Q1). NERC noted that this Q2 obligation accounted for roughly 49.60 percent of the total invoices issued by electricity generation companies (GenCos), a slight improvement from the 51.95 percent recorded in the preceding quarter.

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​On market performance, DisCos remitted N306.62 billion out of the N326.46 billion Tariff-Shortfall-Adjusted (DRO-adjusted) invoice issued by the Nigerian Bulk Electricity Trading Plc (NBET) in Q2, representing a 93.92 percent remittance rate. While seven utility firms—Benin, Eko, Enugu, Ibadan, Ikeja, Port Harcourt, and Yola—achieved a 100 percent remittance score to NBET, Kano, Jos, and Kaduna lagged behind with performance rates dipping below 70 percent.

​Similarly, DisCos remitted N78.82 billion out of N83.92 billion invoiced by the Market Operator (MO) for transmission and administrative services, achieving a matching 93.92 percent performance—an incremental rise from the 93.28 percent recorded in Q1.