The Federal Government spent N358.32 billion on electricity subsidies in the first quarter of 2026 as Nigerians continued to experience frequent power outages, according to the latest report by the Nigerian Electricity Regulatory Commission (NERC).
NERC said the subsidy covered the gap created by the government’s decision to maintain electricity tariffs at July 2024 levels instead of introducing cost-reflective pricing.
The commission disclosed that the subsidy amounted to N126.48 billion in January, N116.34 billion in February and N115.50 billion in March, bringing the total for the quarter to N358.32 billion.
Although the figure was lower than the N418.79 billion recorded in the fourth quarter of 2025, NERC explained that the decline was mainly due to reduced electricity purchases by distribution companies (DisCos) rather than any change in the tariff structure.
According to the report, electricity generated during the three-month period attracted invoices worth N689.72 billion. However, DisCos were billed only N331.40 billion, while the Federal Government assumed responsibility for the remaining N358.32 billion through subsidy payments.
NERC said the subsidy accounted for about 52 per cent of the total generation cost during the quarter.
The commission explained that under the current arrangement, the government absorbs the difference between the actual cost of electricity generation and the frozen retail tariff by paying the outstanding amount directly through the market settlement process.
It also warned that the subsidy system exposes the government to unpredictable financial obligations, particularly if electricity demand or generation costs rise.
Meanwhile, electricity supply weakened during the period. Average available generation capacity dropped to 4,457.96 megawatts from 5,400.38MW recorded in the previous quarter.
Total electricity generation also declined to 8,883.47 gigawatt-hours, while average hourly generation fell compared with the last quarter of 2025.
The report further revealed that the national grid experienced two major disturbances in January 2026. A total grid collapse occurred on January 23, followed by a partial collapse on January 27, resulting in widespread power outages across parts of the country.
According to NERC, the total collapse was linked to a fault at the Sapele Transmission Station, while the partial collapse was attributed to inadequate reactive power support needed to maintain grid stability.
