FGN Subsidy Drops to N358.32bn as Tariff Gaps Persist, Grid Collapses Recorded — NERC
The Nigerian Electricity Regulatory Commission (NERC) has revealed that the Federal Government incurred a subsidy obligation of N358.32 billion due to the absence of cost-reflective tariffs across electricity distribution companies (DisCos).
According to the commission, this represents a reduction of N60.46 billion, or 14.44 percent, compared to the N418.79 billion recorded in the fourth quarter of 2025.
According to NERC
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),” 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.”
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 The open-ended nature of the subsidy exposes the FGN to indeterminate subsidy obligations due to volumetric risk and changes in generation costs.” A total collapse occurred on 23 January 2026, and a partial collapse of the grid occurred on 27 January 2026.”
