Electricity Supply May Get Worse as Gas Suppliers Threaten Action Over N3.3tn Debt
- Gas suppliers may halt supply to thermal power plants over debts estimated at N3.3 trillion
- Nigeria’s electricity generation has fallen below 4,000 megawatts due to reduced gas supply
- Industry experts warn that continued gas shortages could worsen Nigeria’s ongoing electricity crisis
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
Nigeria’s electricity supply could decline further in the coming weeks as gas suppliers threaten to stop supplying fuel to thermal power plants over debts estimated at N3.3 trillion.
The warning was given by Joy Ogaji, who said the growing financial crisis in the electricity value chain is putting the sector under significant pressure.
Source: Getty Images
Ogaji disclosed during an interview on Fresh FM monitored by PUNCH, noting that unresolved payment issues between industry players are worsening electricity shortages across the country.
Nigeria has faced frequent power outages in recent months, with many households and businesses experiencing prolonged blackouts since the beginning of the year.
Electricity output falls below 4,000MW
Operational data from the Nigerian Independent System Operator shows that electricity generation has dropped below 4,000 megawatts in recent weeks due largely to limited gas supply to thermal power plants.
As of Tuesday, the country’s 11 electricity distribution companies were sharing only about 3,053 megawatts, a level experts say is insufficient to meet nationwide demand.
Consumers across different electricity supply bands have continued to express concerns over the situation, particularly amid rising fuel costs and high temperatures.
NISO data further indicates that thermal power plants require approximately 1,629.75 million standard cubic feet of gas daily to operate at full capacity.
However, as of February 23, 2026, the available supply was about 692 million standard cubic feet per day, which is less than 43 per cent of what is required.
The shortage has reportedly forced some power plants to shut down operations, while the Transmission Company of Nigeria has implemented load shedding to distribute limited electricity among distribution companies.
Distribution companies have also attributed ongoing outages to reduced gas supply to generating plants.
Explaining the root of the crisis, Ogaji said the main issue stems from outstanding payments owed to power generation companies by the Nigerian Bulk Electricity Trading (NBET) Plc, the government-backed agency responsible for purchasing electricity from generation companies and selling it to distribution firms.
N6.8tn debt weighs on power sector
According to her, the federal government currently owes generation companies about N6.8 trillion for electricity supplied to the national grid since the sector was privatised in 2013.
Ogaji explained that roughly 70 per cent of that debt relates to gas-fired power plants, meaning a large share of the funds is owed to gas suppliers.
Industry estimates suggest that around N3.3 trillion of the total debt is owed directly to gas producers whose fuel powers most of Nigeria’s electricity generation.
She said gas suppliers have informed power producers that future deliveries may depend on payment guarantees.
“Gas is not available because the suppliers have told us that if we need gas, we must provide payment before it can be delivered,” Ogaji said.
GenCos struggle with loans, rising costs
The GenCo chief added that generation companies are also struggling to service bank loans obtained during the power sector’s privatisation.
She noted that most of the loans were secured in foreign currency in 2013 when the exchange rate was about N155 to the dollar. With the naira now trading above N1,400 to the dollar, the debt burden has increased significantly.
According to Ogaji, even if the government settles the current N6.8 trillion debt immediately, the amount may still be insufficient to cover obligations to gas suppliers, lenders and operational expenses.
Thermal power plants currently account for about 70 per cent of electricity generation on Nigeria’s national grid, meaning any disruption in gas supply could significantly reduce electricity output.
Source: Getty Images
FG responds to power crisis
Meanwhile, the Minister of Power, Adebayo Adelabu, said the federal government is addressing the issue.
Speaking through his media aide, Bolaji Tunji, the minister said the matter is being handled in collaboration with the Minister of State for Petroleum (Gas), Ekperikpe Ekpo.
“It is being handled jointly with the Minister of State for Petroleum (Gas),” Tunji said in a brief message.
Industry data shows that gas producers supplied about 179.79 billion standard cubic feet of gas to power generation companies between January and July 2025, valued at around N607 billion. However, unpaid legacy debts remain a major challenge in the sector.
NERC orders registration of private substations
Legit.ng earlier reported that the Nigerian Electricity Regulatory Commission (NERC) has issued a new order regulating private transmission substations connected to the national grid.
The directive requires operators to obtain an Independent Electricity Transmission Network Operator permit.
The Nigerian Independent System Operator will install IoT-based metering systems and conduct inspections.
Source: Legit.ng
