Nigeria’s president, Bola Tinubu, has authorized the payment of N185 billion in overdue bills to natural gas producers, a significant step toward strengthening Nigeria’s gas industry and boosting power generation.
The statement was made on Thursday by Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas).
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According to his spokesman, Louis Ibah, the decision was approved on Wednesday by the National Economic Council, which is chaired by Vice President Kashim Shettima.
The intervention is considered one of the most significant in Nigeria’s energy sector in recent years.
The N185 billion indicates the government’s long-term liabilities to gas producers for past shipments, as seen in a statement.
“The payment, to be executed through a royalty-offset arrangement, is expected to restore confidence among domestic and international gas suppliers who have long expressed concern about persistent indebtedness in the sector,” the statement reads.
These outstanding debts had stressed cash flow, hampered operations, inhibited new exploration and production, and restricted gas availability for electricity generation, exacerbating Nigeria’s ongoing power shortfall.
Ekpo stated that the payment will be made through a royalty-offset scheme, which is designed to rebuild trust among local and foreign gas suppliers who have long expressed worries about arrears in the industry.
The minister also stated that enhanced financial stability is projected to boost upstream activities, expedite exploration and production, and eventually raise Nigeria’s gas output.
He further stated that these improvements are likely to stimulate broader economic growth, with reliable electricity supporting industrialisation, job creation, and competitiveness, the Punch reports.
Ed Ubong, Coordinating Director of the Decade of Gas Secretariat, praised the approved plan to erase gas-to-power debts as a clear indication of President Tinubu’s commitment to resolving structural difficulties 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. It could unlock stalled projects, revive investor interest, and rebuild momentum behind Nigeria’s transition to a gas-driven economy,” Ubong stated.
