Electricity subsidy drops to 358.32bn in Q1 over poor supply

The federal government’s subsidy payment in the electricity sector dropped to its lowest level in the last two years due to the erratic power supply and load shedding experienced on the national grid in the first quarter of the year. According to the Q1 report produced by the Nigerian Electricity Regulatory (NERC), the government incurred […]

The federal government’s subsidy payment in the electricity sector dropped to its lowest level in the last two years due to the erratic power supply and load shedding experienced on the national grid in the first quarter of the year.
According to the Q1 report produced by the Nigerian Electricity Regulatory (NERC), the government incurred a subsidy payment of N358.32bn, representing a N60.46bn (-14.44%) reduction in FGN’s subsidy compared to 2025/Q4 (N418.79bn).
It would be recalled that in the absence of cost-reflective tariffs for electricity bands B, C, D and E, the government undertakes to cover the resultant gap (between the cost-reflective and allowed tariff) in the form of tariff subsidies.
The report said the government incurred N126.48bn subsidy payment in January which reduced to N116.34bn in February and further dropped to N115.50bn in March.
When compared to previous quarters the government incurred N418.79bn debt in Q4 2025 a reduction from the N458.75bn in Q3 2025.
In Q2 2025, the subsidy payment was N514.35bn debt compared to the N536.40bn it incurred in Q1 2025.
For Q4 2024, the subsidy payment was N471.69bn from the N464.12 incurred in Q3 2024, while in Q2 it was N380.06bn and N633.30bn in Q1.

How load shedding marred first quarter of 2026

Nigerians felt the heat in the month of February and March at the peak of the sunny season when gas suppliers cut supply to electricity generation companies.

The Nigerian Independent System Operator (NISO) had during the period said the national grid was receiving only one-third of gas supply needed to provide adequate electricity supply to Nigerians.

In a statement, the management of NISO said this has brought on low supply across the country, leading to load shedding.

It noted that it has caused the reduction of electricity generation to 4,300 Megawatts.

It had stated that thermal plants account for the dominant share of Nigeria’s generation mix, thus any disruption or limitation in gas supply directly affects available generation capacity and overall grid output.

Consequently, the current energy allocated to Distribution Companies (DisCos) reflects the reduced supply available on the grid.”

“Available operational data indicates that thermal power plants collectively require an estimated 1,629.75 million standard cubic feet (MMSCF) of gas per day to operate at optimal capacity. However, as of February 23, 2026, actual gas supply to the stations stood at approximately 692.00 MMSCF, representing a significant shortfall in daily gas supply requirements.”

The NERC report also confirmed this, stating that the average hourly generation on the grid in the quarter was 4,112.72MWh/h.

It added that the average hourly generation of the grid-connected power plants decreased by 339.99MWh/h (-7.64%) from 4,452.71MWh/h in 2025/Q4.

This also affected Electricity Distribution’s commercial performance as factsheets released by NERC showed that the 11 DisCos collected N204.74bn in January, N196.68bn in February and N196.13bn in March.