The Federal Government is to pay N358.32bn on electricity subsidies in the first quarter of 2026 despite persistent blackouts and operational challenges in the power sector, with the subsidy bill averaging over N119bn monthly as the government continues to freeze end-user tariffs.
The Nigerian Electricity Regulatory Commission disclosed this in its First Quarter 2026 report, stating that the subsidy arose from the Federal Government’s decision to retain electricity tariffs at the July 2024 rates instead of implementing cost-reflective tariffs.
According to the report, the tariff shortfall stood at N126.48bn in January, N116.34bn in February and N115.50bn in March, bringing the total subsidy for the quarter to N358.32bn.
NERC explained that although the subsidy declined by N60.46bn or 14.44 per cent from the N418.79bn recorded in the fourth quarter of 2025, the government will still finance more than half of the industry’s generation costs.
“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).
