The Federal Government’s electricity subsidy obligation fell to N679.58 billion in the first half of 2026, according to the Nigerian Electricity Regulatory Commission (NERC).
The figure represents a 35.27 percent decline from the ₦1.05 trillion subsidy obligation recorded during the corresponding period in 2025.
NERC disclosed the figures in its second-quarter 2026 report, which showed that the government’s subsidy obligation stood at ₦321.26 billion between April and June, compared with ₦358.32 billion in the first quarter.
“It is important to note that due to the absence of cost reflective tariffs across all DisCos, the Government incurred a subsidy obligation of ₦321.26 billion; this represents a ₦37.06 billion (-10.34%) reduction in FGN subsidy compared to 2026/Q1 (₦358.32 billion),” the statement reads.
The commission said the subsidy recorded in the second quarter accounted for 49.60 percent of the total invoices issued by electricity generation companies (GenCos), down from 51.95 percent in the preceding quarter.
NERC attributed the reduction mainly to a 3.40 percent decline in electricity offtake by distribution companies (DisCos) between the first and second quarters.
“In 2026/Q2, the DRO-adjusted invoice from NBET to the DisCos was ₦326.46 billion, while the total remittance made was ₦306.62 billion, which translates to 93.92% remittance performance,” NERC said.
“Comparatively, in 2026/Q1, the DRO-adjusted invoice from NBET to DisCos was ₦331.40 billion, and the total remittance was ₦312.48 billion, which translated to 94.29% remittance performance.”
Seven DisCos — Benin, Eko, Enugu, Ibadan, Ikeja, Port Harcourt and Yola — recorded full remittance performance to the Nigerian Bulk Electricity Trading Plc (NBET) during the quarter.
READ ALSO: NERC Clarifies Free Meter Policy, Warns Against Illegal Charges
“Kano (66.51%), Jos (62.39%) and Kaduna (50.10%) DisCos achieved less than 70% remittance rate for the quarter,” NERC said.
The commission also highlighted changes in the performance of individual DisCos compared with the first quarter.
“A quarter-on-quarter analysis showed that Yola ( 16.45pp), Ibadan ( 6.38pp), Kaduna (5.52pp), and Enugu ( 0.68pp) DisCos recorded improvements in remittance performance to NBET while Kano (-18.66pp), Jos (-4.71pp), and Abuja (-1.02pp) DisCos recorded decreases in remittance performance in 2026/Q2 compared to 2026/Q1.”
Beyond payments to NBET, NERC said the market operator also billed DisCos for energy transmission and administrative services during the quarter.
“The Market Operator issues invoices to DisCos for energy transmission and administrative services. In 2026/Q2, DisCos made a total remittance of ₦78.82 billion against the cumulative invoice of ₦83.92 billion issued by the MO,” NERC said.
The commission said the payments amounted to 93.92 percent of the market operator’s invoices, representing a marginal improvement from the previous quarter.
According to the report, this payment translates to “93.92% remittance performance and represents an increase of 0.64pp when compared to 93.28% remittance performance recorded in 2026/Q1 when DisCos remitted ₦83.74 billion out of ₦89.78 billion invoice issued by the MO”.
NERC said all DisCos except Abuja, Yola, Ibadan, Kano, Jos and Kaduna achieved 100 percent remittance performance to the market operator in the second quarter.
The report put the remittance rates for Abuja, Yola and Ibadan at 99.93 percent, 99.34 percent and 98.73 percent, respectively. Kano recorded 69.72 percent, while Jos and Kaduna recorded 67.09 percent and 57.86 percent.
Compared with the first quarter, Kano and Jos recorded declines of 14.97 percentage points and 5.32 percentage points, respectively, in their remittance performance to the market operator.