Tinubu Approves Payment of N185bn Gas Debts to Boost Power Generation
- The Federal Government approved the settlement of N185 billion owed to natural gas producers
- The decision was endorsed by the NEC and announced by the Minister of Petroleum Resources
- The payment aims to restore gas supply, support power generation, and rebuild investor confidence
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, tech and macroeconomic trends in Nigeria.
President Bola Tinubu has approved the settlement of N185 billion in outstanding debts owed to natural gas producers, a move aimed at improving gas supply and supporting power generation across the country.
The News Agency of Nigeria reported that the approval was endorsed on Wednesday by the National Economic Council (NEC), chaired by Vice-President Kashim Shettima.
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FG to expand Nigeria’s gas output
According to a statement released by the Minister of State for Petroleum Resources (Gas), Dr Ekperikpe Ekpo, clearing the longstanding arrears is expected to restore confidence among gas producers and strengthen operations within the sector.
The debt, accumulated over years of unpaid obligations for gas supplied, had affected cash flow for producers and discouraged further exploration and production.
This decline in supply contributed to the persistent electricity shortages that have impacted homes and businesses nationwide.
Ekpo said the payment, which will be implemented through a royalty-offset arrangement, represents a major step toward rebuilding trust with domestic and international gas suppliers.
He described the approval as a key milestone in efforts to revitalise the gas sector and improve power generation capacity.
The minister noted that the initiative aligns with the Decade of Gas agenda, which seeks to expand Nigeria’s gas output to more than 12 billion cubic feet per day by 2030.
He added that restoring financial stability for producers would help drive new investments, stimulate exploration activities, and ultimately increase gas supply.
“Settling the debts is crucial to rebuilding trust between the government and gas producers, many of whom have withheld or slowed new investments due to uncertainty over payments,” he said.
He stressed that improved gas availability will enhance electricity generation and support broader economic growth, as a consistent energy supply remains vital for industrial productivity, jobs, and competitiveness.
He also highlighted that the intervention is expected to promote greater fiscal discipline and transparency in the sector, helping attract both local and foreign investors.
The Coordinating Director of the Decade of Gas Secretariat, Mr Ed Ubong, welcomed the approval, saying it demonstrated the Federal Government’s commitment to addressing structural gaps in the gas-to-power value chain.
Source: Twitter
Ubong noted that settling the debts could revive stalled projects and encourage renewed investor participation in Nigeria’s transition toward a gas-driven economy.
Nigeria’s Power Sector Attracts New $2bn Investments
Legit.ng earlier reported that Nigeria’s power sector has secured more than $2 billion in new investments in the energy sector due to ongoing reforms by the federal government
The Minister of Power, Adebayo Adelabu, credited the Electricity Act 2023 for the inflow of capital into the sector.
Meanwhile, this has not translated into a stable power supply for the majority of Nigerians, as the country struggles to generate above 6,000 megawatts of electricity.
Source: Legit.ng
