FG approves N185bn to settle gas debts to boost power supply
The federal government has approved ₦185 billion to clear longstanding debts owed to natural gas producers for supplies delivered to power generation companies a major intervention in the energy sector.
In a statement, Louis Ibah, spokesperson for the Minister of State for Petroleum Resources (Gas), said the move follows President Bola Tinubu’s directive to pay off arrears that have hindered investment and disrupted gas supply. The approval was endorsed by the National Economic Council, chaired by Vice President Kashim Shettima.
“The ₦185 billion legacy debts longstanding government obligations to gas producers for past deliveries — have strained cash flow and hindered operations, discouraged further exploration and production, and reduced gas supply to power plants, deepening Nigeria’s electricity shortages,” Ibah said.
The payment will be executed through a royalty offset arrangement and is expected to restore confidence among domestic and international gas suppliers who have long raised concerns about chronic indebtedness in the sector.
Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, described the approval as a decisive step toward revitalising the gas sector and strengthening Nigeria’s power generation capacity in a sustainable way. He praised Tinubu’s leadership and said the move aligns with the decade of gas initiative, which targets unlocking more than twelve billion cubic feet per day of gas supply by 2030.
Ekpo said clearing the arrears will help rebuild trust between government and producers, many of whom have slowed or halted new investments due to uncertainty over payment. Improved financial stability, he added, will support upstream activities, accelerate exploration and production, and ultimately boost overall gas output.
He also noted that increased gas supply will enhance power generation and help ease persistent electricity shortages affecting households and businesses nationwide. Reliable energy, he said, is essential for industrialisation, job creation and economic competitiveness.
Ed Ubong, director of the decade of gas secretariat, said the move sends a clear signal that the administration is committed to addressing structural weaknesses across the gas 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,” he said.
Ubong added that settling the debts could unlock stalled projects, revive investor interest and accelerate Nigeria’s transition to a gas driven economy.
