The federal government has approved ₦185 billion to settle longstanding debts owed to natural gas producers, a move aimed at revitalizing Nigeria’s power sector and addressing chronic electricity shortages. The funds cover payments for gas supplied to power generation companies over previous years, marking one of the largest financial interventions in the energy sector in recent times.
Louis Ibah, spokesperson for the Minister of State for Petroleum Resources (Gas), said the approval follows directives from President Bola Tinubu to clear outstanding arrears that have stifled investment and disrupted gas supply. The National Economic Council, led by Vice President Kashim Shettima, endorsed the payment.
Ibah explained that the legacy debts had strained cash flow for gas producers, limited exploration and production, and reduced gas availability for power generation. These issues, he noted, have contributed significantly to Nigeria’s ongoing power supply challenges and unreliable electricity distribution.
The repayment will be carried out through a royalty offset arrangement, designed to restore confidence among domestic and international gas suppliers. Industry experts hope the move will encourage renewed investment in the sector and stabilize gas delivery to power plants across the country.