The Federal Government has approved the payment of N185 billion owed to natural gas producers to restore supply and support power generation nationwide. President Bola Tinubu authorised the intervention, which received formal endorsement from the National Economic Council led by Vice-President Kashim Shettima.
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, said the accumulated arrears had weakened producers’ finances, slowed exploration work, and reduced gas flow to power plants. He said the settlement, to be processed through a royalty-offset arrangement, is intended to rebuild confidence among domestic and international suppliers who have repeatedly raised concerns about delayed payments.
He said the move is aligned with the Decade of Gas programme, which aims to expand national gas supply to more than 12 billion cubic feet per day by 2030. According to him, producers withheld investment because of uncertainty over outstanding obligations, and clearing the debt will enable upstream activity to resume at a faster pace.
He said increased gas availability will strengthen power generation and reduce persistent electricity shortages that continue to affect businesses and households. He added that improved fiscal discipline and transparency in the sector will support long-term investment and enhance competitiveness.
The Coordinating Director of the Decade of Gas Secretariat, Ed Ubong, said the approval reflects the administration’s commitment to repairing structural weaknesses across the energy value chain. He said the clearance of debts could revive stalled projects and rebuild investor confidence in Nigeria’s gas-driven economic agenda.
The decision follows recent government action on a N4 trillion bond framework intended to settle verified arrears owed to power generation companies and gas suppliers. Earlier in 2024, Shell Petroleum Development Company of Nigeria reported that gas producers were managing outstanding payments estimated at $1.3 billion. The Nigerian Midstream and Downstream Petroleum Regulatory Authority also directed producers to suspend supply to indebted power firms after liabilities surpassed N2 trillion.
