The Federal Government has approved the payment of N185bn in outstanding debts owed to natural gas suppliers in a bid to ease liquidity pressures in the sector and improve electricity generation nationwide.
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, announced the approval in a statement issued on Thursday by his media aide, Louis Ibah. He said the decision was reached on Wednesday at the National Economic Council meeting chaired by Vice President Kashim Shettima.
According to Ekpo, the long-standing debts had strained the cash flow of gas producers, slowed investments, and restricted gas deliveries to power plants—deepening the country’s persistent electricity shortages. The payment will be executed through a royalty-offset arrangement.
“The payment is expected to restore confidence among domestic and international gas suppliers who have long expressed concern about persistent indebtedness in the sector,” the statement said.
Ekpo described the intervention as a decisive step toward revitalising Nigeria’s gas sector and strengthening its power-generation capacity in line with the government’s Decade of Gas initiative, which targets more than 12 billion cubic feet per day of gas supply by 2030.
He added that clearing the arrears will help rebuild investor confidence, accelerate exploration and production activities, and ultimately raise gas output for power plants. “Increased gas supply will also boost power generation and ease the long-standing electricity shortages that continue to hinder businesses across the country,” he said.
The minister noted that the expected improvements in power supply would support broader economic growth by enhancing industrialisation, job creation, and competitiveness.
READ ALSO: Court Orders Police Takeover of Nestoil Assets Amid $1.01bn, ₦430bn Debt Row
The Coordinating Director of the Decade of Gas Secretariat, Ed Ubong, said the approval demonstrates the government’s commitment to addressing structural challenges in the gas-to-power value chain.
“This decision underlines the Federal Government’s determination to clear legacy liabilities and give gas producers the confidence that supplies to power generation will be honoured,” Ubong said. He added that the move could unlock stalled projects, revive investor interest, and rebuild momentum behind Nigeria’s transition to a gas-driven economy.
In 2024, gas producers halted supplies to power plants over unpaid debts. The N185bn payment is expected to boost gas availability to electricity generation companies, with potential to raise national grid output, which has hovered around 5,000MW in recent months.