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Discos’ energy offtake drops by 8.6%, as FG incurs N358.3bn in tariff subsidy debt Q1, ’26
Nigerian Electricity Regulatory Commission (NERC) has disclosed that the federal government incurred an electricity tariff subsidy of N358.32 billion in the first quarter of 2026.
NERC, which made the disclosure in its First Quarter 2026 Report released, Monday, explained that the electricity tariff debt by the government itself represented a drop by 14.44 per cent from the N418.79 billion recorded in the fourth quarter of 2025.
According to the commission, the debt follows the government’s decision to continue to bridge the gap between cost-reflective electricity tariffs and the rates paid by consumers.
However, NERC explained that the 14.44 per cent decline in subsidy tariff debt mainly to lower electricity offtake by distribution companies (DisCos), rather than improvements in their tariff recovery.
Oracle Intelligence has earlier Monday reported that the 11 DisCos operating in the country collected N597.56 billion out of the N756.93 billion billed to customers during the first quarter of this year
Meanwhile, NERC clarified that since electricity tariffs remain below cost-reflective levels, Federal Government continues to subsidise the difference between the actual cost of power generation and the approved tariffs charged to consumers.
Under the current Distribution Companies’ Remittance Obligation (DRO) framework, the subsidy covers part of the generation costs payable by DisCos to the Nigerian Bulk Electricity Trading Plc (NBET), while the Federal Ministry of Finance settles the outstanding balance.
According to the report, electricity generation companies invoiced a total of N689.72 billion for power supplied to the 11 electricity distribution companies during the quarter. However, only N331.40 billion was billed to the DisCos under the DRO arrangement, leaving the Federal Government to cover the remaining N358.32 billion.
NERC said the subsidy accounted for 51.95 per cent of the total generation invoice during the period, compared with 52.03 per cent 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.
