The Federal Government of Nigeria has taken a significant step towards revitalizing the gas industry and stabilizing power generation. President Bola Tinubu has authorized the settlement of 185 billion in long-standing debts owed to natural gas producers. This move, endorsed by the National Economic Council, aims to address the legacy debts that have strained cash flow and hindered operations in the sector.
The payment, to be executed through a royalty-offset arrangement, is expected to restore confidence among domestic and international gas suppliers. The Minister of State Petroleum Resources, Ekperikpe Ekpo, described the approval as a “decisive step towards revitalizing Nigeria’s gas sector and strengthening its power-generation capacity in a sustainable manner.” The intervention aligns with the Decade of Gas initiative, which aims to unlock more than 12 billion cubic feet per day of gas supply by 2030.
The settlement of the debts is crucial to rebuilding trust between the government and gas producers, many of whom have withheld or slowed new investments due to uncertainty over payments. Improved financial stability will help revive upstream activity by accelerating exploration and production, ultimately boosting Nigeria’s gas output. Increased gas supply will also boost power generation and ease the long-standing electricity shortages that continue to hinder businesses across the country.
The move is expected to stimulate broader economic growth, as reliable energy underpins industrialization, job creation, and competitiveness. Better fiscal discipline and enhanced transparency across the sector will further attract fresh investment from both local and foreign players. The Coordinating Director of the Decade of Gas Secretariat, Ed Ubong, said the approved plan to clear gas-to-power debts sends a powerful signal of commitment from President Tinubu to address structural weaknesses across the value chain.
The settlement of the legacy debts is a significant step towards unlocking stalled projects, reviving investor interest, and rebuilding momentum behind Nigeria’s transition to a gas-driven economy. With the payment expected to restore confidence among gas suppliers, the government hopes to increase gas supply and improve power generation, ultimately driving economic growth and development. The move is a positive step towards addressing the country’s energy challenges and achieving a more sustainable energy future.