By Obas Esiedesa, Abuja
The Federal Government (FG) incurred an electricity tariff subsidy obligation of N358.32 billion in the first quarter of 2026 as it continued to bridge the gap between cost-reflective electricity tariffs and the rates paid by consumers, according to the latest report by the Nigerian Electricity Regulatory Commission (NERC).
The Commission, in its First Quarter 2026 report released on Monday, said the subsidy represented a N60.46 billion, or 14.44 per cent, decline from the N418.79 billion recorded in the fourth quarter of 2025, largely due to lower electricity offtake by distribution companies (DisCos) rather than improvements in tariff recover.
NERC explained that in the absence of cost-reflective tariffs, the FG covers the difference between the actual cost of electricity generation and the approved tariffs through tariff subsidies.
Under the current Distribution Companies’ Remittance Obligation (DRO) framework, the subsidy is applied to the generation costs payable by DisCos to the Nigerian Bulk Electricity Trading Plc, while the government directly settles the outstanding portion with the Federal Ministry of Finance.
