Nigeria’s gas and power sectors have received a significant lift as the Federal Government approved the payment of N185 billion in legacy debts owed to gas producers — a decision expected to unlock new investments and guarantee improved gas supply to power plants across the country.
The approval, granted at the 154th National Economic Council (NEC) meeting held on December 3, 2025, follows President Bola Ahmed Tinubu’s renewed commitment to accelerating upstream gas development and strengthening gas-to-power delivery nationwide.
Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, who commended the President for the intervention, said clearing the long-standing debts would ensure uninterrupted gas supply to GenCos and significantly improve electricity generation. He added that the move demonstrates Tinubu’s determination to fully implement the Decade of Gas programme, which seeks to unlock over 12 billion standard cubic feet of gas supply per day by 2030.
Nigeria, one of Africa’s leading gas-rich nations, has grappled with inadequate infrastructure, regulatory bottlenecks and financial constraints that have slowed growth across the gas value chain. A major challenge has been the accumulation of unpaid debts to gas producers, which weakened investor confidence, strained the finances of operators and limited exploration activity. This debt backlog also resulted in reduced gas supply to power plants, worsening the country’s electricity shortages.
The N185 billion legacy debt, accumulated from previous gas supply obligations, has long hampered the cash flow and operational capacity of producing companies. The decision by NEC to clear the debts through a royalty offset mechanism signals a decisive effort by government to restore confidence among investors, revive upstream activities and stabilise gas supply for power generation.
Ekpo noted that the President’s leadership in this area marks a new phase in Nigeria’s energy sector reform, adding that the payment will remove one of the biggest impediments to consistent gas delivery. He said the intervention is expected to stimulate fresh investments, support increased domestic production and strengthen the country’s ability to deliver stable electricity to industries and households.
He thanked President Tinubu for prioritising the gas sector, noting that the approval would accelerate the Decade of Gas implementation and position the sector for sustainable long-term growth. Ekpo expressed optimism that with this development, Nigeria would witness improved gas supply to power plants and a more reliable electricity supply nationwide.
