Saturday, December 6, 2025 - The federal government has approved one hundred eighty-five billion naira to settle long standing debts owed to natural gas producers for supplies delivered to power generation companies, marking one of the most significant interventions in the energy sector in recent years.
In a statement, Louis Ibah, spokesperson for the minister of
state for petroleum resources (gas), said the decision followed President Bola
Tinubu’s directive to clear 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 N185 billion legacy debts, longstanding government
obligations to gas producers for past supplies, have strained cash flow and
hindered operations, discouraged further exploration and production, and
reduced gas supply for power generation, thereby worsening Nigeria’s power
shortages and unreliable electricity supply,” 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
industrialization, 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.
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