By Ambrose Nnaji
The Federal Government has commenced the repayment of N185 billion in long-standing gas debts, a decisive intervention aimed at reviving Nigeria’s gas market and restoring stability to the country’s fragile power sector.
President Bola Tinubu approved the settlement plan following recommendations by the National Economic Council (NEC) chaired by Vice-President Kashim Shettima—marking one of the most significant financial commitments to the energy sector in recent years.
In a statement, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, described the move as a “critical step toward revitalising Nigeria’s gas sector and strengthening power generation in a sustainable manner.”
The debts, accumulated from gas supplied to power plants over several years, had severely weakened producers’ cash flows, stalled new investments, and constrained gas supply, thereby worsening electricity shortages nationwide.
Ekpo said the repayment—structured through a royalty-offset arrangement—is expected to rebuild trust with both local and international gas producers who have long expressed concerns over the government’s persistent indebtedness.
“Settling these obligations is essential to restoring investor confidence. Many producers withheld or slowed new investments because of uncertainty around payment,” he noted.
According to the minister, the intervention will restart upstream activities, accelerate exploration and production, and ultimately raise Nigeria’s gas output. Increased supply, he added, would translate into more reliable power generation—easing chronic electricity shortages that have crippled businesses and industrial growth for decades.
He said the anticipated gains extend beyond the energy sector, noting that dependable electricity is fundamental to industrialisation, job creation, and broader economic competitiveness. He also emphasised that improved fiscal discipline and greater transparency across the gas value chain would attract fresh investment from both local and foreign players.
The Coordinating Director of the Decade of Gas Secretariat, Ed Ubong, said the move demonstrated President Tinubu’s resolve to address structural weaknesses and reposition the sector for growth.
“This decision underlines the government’s determination to clear legacy liabilities and give gas producers the confidence that supplies to power generation will be honoured,” he said. “It could unlock stalled projects, revive investor interest, and rebuild momentum behind Nigeria’s transition to a gas-driven economy”, he added.
