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

The Federal Government spent N358.32 billion on electricity subsidies in the first quarter of 2026 despite worsening power supply and repeated national grid collapses, according to the Nigerian Electricity Regulatory Commission (NERC).

In its First Quarter 2026 report, NERC said the subsidy resulted from the government’s decision to retain electricity tariffs at July 2024 rates instead of adopting cost-reflective pricing.

The regulator disclosed that subsidy payments stood at N126.48bn in January, N116.34bn in February and N115.50bn in March, averaging over N119bn monthly.

“It is important to note that due to the absence of cost-reflective tariffs across all DisCos, the government incurred a subsidy obligation of N358.32bn… this represents a N60.46bn (-14.44 per cent) reduction in FGN subsidies compared to 2025/Q4 (N418.79bn),” NERC said.

It added that, “The government subsidy accounted for 51.95 per cent of the total GenCo invoice. The key driver of this reduction… is the decrease in energy offtake of the DisCos by -8.56 per cent between 2025/Q4 and 2026/Q1.”

According to the report, electricity generation during the quarter attracted invoices of N689.72bn, but DisCos were billed only N331.40bn, with the Federal Government covering the remaining N358.32bn.

“The NBET invoice payable by the DisCos for 2026/Q1 was only N331.40bn because the FGN has taken responsibility for approximately 52 per cent (N358.32bn) of the total generation costs,” it stated.

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

Despite the huge spending, electricity supply declined. Average available generation capacity dropped 17.45 per cent to 4,457.96MW, while total electricity generated fell 9.64 per cent to 8,883.47GWh.

The commission also reported two grid disturbances that triggered widespread blackouts, “A total collapse occurred on 23 January 2026, and a partial collapse of the grid occurred on 27 January 2026.”