The Federal Government (FG) has taken a major step to stabilize Nigeria’s energy sector by approving the payment of N185 billion in outstanding debts owed to natural gas producers. The move, endorsed by President Bola Tinubu and the National Economic Council (NEC) chaired by Vice-President Kashim Shettima, aims to revitalize the gas sector and improve electricity supply across the country.
Dr. Ekperikpe Ekpo, the Minister of State for Petroleum Resources (Gas), emphasized that settling these long-standing arrears will restore investor confidence and remove financial barriers that have limited exploration and production. He noted that the accumulated debts had significantly strained producers’ cash flow and reduced gas supply to power plants, worsening nationwide electricity shortages.
The approved payment will be executed through a royalty-offset arrangement, ensuring that both domestic and international gas suppliers are reassured about timely government settlements. According to Dr. Ekpo, this decisive step aligns with the Decade of Gas initiative, which seeks to unlock over 12 billion cubic feet per day (bcf/d) of gas by 2030, driving a sustainable increase in power-generation capacity.
Officials say the intervention is expected to stimulate upstream activity, accelerate exploration and production, and ultimately boost gas output. “Reliable energy is the backbone of industrialization, job creation, and economic competitiveness,” Dr. Ekpo said, highlighting how improved financial stability in the sector could foster broader economic growth.
Ed Ubong, Coordinating Director of the Decade of Gas Secretariat, described the plan as a clear signal of the FG’s commitment to addressing structural weaknesses in the gas-to-power value chain. The move is anticipated to unlock stalled projects, attract fresh investment, and strengthen Nigeria’s transition toward a gas-driven economy, marking a critical milestone in the nation’s energy roadmap.
source: Nairametrics