Nigeria approves $128 million payment for gas debts in bid to boost power supply

Government Moves to Clear Longstanding Gas Debts

The Federal Government of Nigeria has approved the payment of ₦185 billion (approximately $128 million) owed to gas producers for long-overdue gas supplies to power generation companies.
The decision aims to restore confidence in the country’s energy market, stimulate investment, and improve national electricity output.

This was confirmed on Wednesday in Abuja after the National Economic Council (NEC) chaired by the Vice President, endorsed President Bola Tinubu’s directive to clear the accumulated arrears.

Debt Arrears Have Hurt Investment and Gas Supply

According to Ekperikpe Ekpo, Minister of State for Petroleum (Gas), the unpaid debts have discouraged gas sector investors, strained operators’ cash flow, and limited the amount of gas available for power generation.

Ekpo stated that the government will settle the debts via a “royalty-offset arrangement”, adding that the step is critical to rebuilding the sector.

“This is a decisive step toward revamping Nigeria’s gas sector and stabilising electricity output,” he said.

Nigeria Targets Expanded Gas Production by 2030

The minister also noted that the payment aligns with the government’s larger plan to almost double the country’s daily gas output to 12 billion cubic feet by the year 2030.

This expansion is expected to support power generation, industrial gas use, and export commitments, potentially revitalising the country’s energy-dependent economy.

Persistent Power Shortages Still Challenge Growth

Despite being Africa’s largest economy and most populous nation, Nigeria continues to struggle with chronic electricity shortages.
These power deficits have hampered industrial operations, discouraged foreign investment, and slowed economic growth for decades.