Tinubu Government Spends ₦358 Billion On Electricity Subsidy As DisCos Struggle To Collect Revenue

The Federal Government spent ₦358.32 billion on electricity tariff subsidies in the first quarter of 2026, according to the latest report released by the Nigerian Electricity Regulatory Commission (NERC).....KINDLY READ THE FULL STORY HERE▶

In its First Quarter 2026 Report, published on Monday, the commission said the subsidy represented a 14.44 per cent decline from the ₦418.79 billion recorded in the fourth quarter of 2025.

NERC explained that the reduction was largely driven by lower electricity offtake by distribution companies (DisCos), rather than any meaningful improvement in cost recovery through electricity tariffs.

The commission noted that electricity tariffs remain below cost-reflective levels, requiring the Federal Government to continue bridging the gap between the actual cost of power generation and the tariffs approved for consumers.

Under the current Distribution Companies’ Remittance Obligation (DRO) framework, DisCos pay only a portion of the cost of electricity supplied to them by the Nigerian Bulk Electricity Trading (NBET) Plc, while the Federal Ministry of Finance settles the outstanding balance through subsidy payments.

According to the report, electricity generation companies issued invoices totalling ₦689.72 billion for power supplied to the country’s 11 electricity distribution companies during the review period.

Of that amount, only ₦331.40 billion was charged to the DisCos under the existing remittance framework, leaving the Federal Government to offset the remaining ₦358.32 billion.

NERC said the subsidy accounted for 51.95 per cent of the total generation invoice in the first quarter, slightly below the 52.03 per cent recorded in the preceding quarter.

“The key driver of this reduction in the Federal Government’s subsidy obligation is the decrease in energy offtake by the DisCos by 8.56 per cent between the fourth quarter of 2025 and the first quarter of 2026,” the commission stated.

DisCos Generated ₦597.56 Billion in Customer Payments

The report also revealed that the 11 electricity distribution companies collected ₦597.56 billion from customers out of a total billing of ₦756.93 billion during the first quarter of the year.

This translated to a collection efficiency of 78.95 per cent, slightly lower than the 79.36 per cent recorded in the previous quarter.

Among the distribution companies, Ikeja Electric recorded the highest collection efficiency at 90.0 per cent, followed by Eko DisCo with 89.64 per cent.

Other strong performers included Benin DisCo with 85.16 per cent, Port Harcourt DisCo at 81.22 per cent, and Abuja DisCo, which achieved 80.90 per cent.

At the other end of the ranking, Kaduna DisCo posted the lowest collection efficiency at 45.81 per cent.

NERC added that Jos, Kaduna, Kano, Port Harcourt and Benin DisCos recorded improvements in their collection performance compared to the previous quarter, while the remaining six distribution companies experienced declines, with Enugu DisCo recording the sharpest drop.