Tinubu Approves Payment of ₦185bn Legacy Gas Debts to Revive Power Sector

Tinubu Approves Payment of ₦185bn Legacy Gas Debts to Revive Power Sector
…Expect Improved Gas Supply To Power Sector, Says Ekpo
Ekpo said clearing the debts is essential to rebuilding trust with gas producers

The Federal Government has announced plans to settle the ₦185 billion legacy debts owed to natural gas producers, a move expected to significantly boost gas supply to Nigeria’s power sector.

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Eko Hot Blog reports that the payment plan, approved by the National Economic Council (NEC) chaired by Vice President Kashim Shettima, represents one of the most far-reaching interventions in the nation’s energy sector in recent years.

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For years, the outstanding debts tied to gas supplied for power generation have weakened the financial capacity of producers, stalled exploration, and discouraged investment. The impact has been a steady decline in gas delivery to power plants, contributing to Nigeria’s persistent electricity shortages and unreliable national grid.

The approved payment, to be implemented through a royalty-offset arrangement, aims to restore confidence among both local and international gas suppliers who have consistently raised alarms over the government’s indebtedness.

Minister of State for Petroleum Resources (Gas), Dr. Ekperikpe Ekpo, described the decision as a “decisive step toward revitalising Nigeria’s gas sector and strengthening its power-generation capacity in a sustainable manner.”

He praised President Bola Ahmed Tinubu’s leadership, noting that the initiative aligns with the Decade of Gas agenda, which targets unlocking more than 12 billion cubic feet per day (bcf/d) of gas supply by 2030.

Tinubu Approves Payment of ₦185bn Legacy Gas Debts to Revive Power Sector

Ekpo said clearing the debts is essential to rebuilding trust with gas producers, many of whom have slowed down new investments due to uncertainty around payment obligations. Restored financial stability, he added, will accelerate exploration and production activities and increase the country’s gas output.

He noted that improved gas supply will directly enhance power generation, easing electricity shortages that have long stifled economic activities, limited industrial growth, and hindered job creation.

The minister further said that better fiscal discipline and transparency across the gas value chain would attract new investments from both domestic and international players.

Coordinating Director of the Decade of Gas Secretariat, Mr. Ed Ubong, said clearing the gas-to-power debts sends a strong signal of the President’s commitment to addressing structural weaknesses in Nigeria’s energy sector.