The Federal Government has approved the settlement of N185 billion in long-standing debts owed to natural gas producers.
According to a statement by the Minister of State for Petroleum Resources (Gas), Dr. Ekperikpe Ekpo, the payment was authorised by President Bola Tinubu and endorsed on Wednesday by the National Economic Council (NEC), chaired by Vice-President Kashim Shettima.
He said the approval was in furtherance of efforts to revitalise the gas sector and stabilise power generation nationwide.
Ekpo said clearing the debts would bring wide-ranging benefits, starting with the restoration of investor confidence.
According to him,the N185 billion arrears, accumulated from past gas supply obligations, had strained producers’ cash flow, limited operations, and discouraged further exploration and production.
He further pointed out that the backlog had also reduced gas supply to power plants, worsening electricity shortages nationwide.
The approved settlement, he noted, will be executed through a royalty-offset arrangement designed to reassure both domestic and international suppliers who have repeatedly raised concerns about government indebtedness.
The Minister described the approval as a “decisive step towards revitalising Nigeria’s gas sector and strengthening its power-generation capacity in a sustainable manner.”
He stated that the intervention aligned with the Decade of Gas initiative, which aims to unlock more than 12 billion cubic feet per day (bcf/d) of gas supply by 2030.
“Settling 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,” he said.
Ekpo explained that improved financial stability would help revive upstream activity by accelerating exploration and production, ultimately boosting Nigeria’s gas output.
He added that increased gas supply would also boost power generation and ease the long-standing electricity shortages that continue to hinder businesses across the country.
According to the Minister, these gains are expected to stimulate broader economic growth, as reliable energy underpins industrialisation, job creation, and competitiveness.
He added that better fiscal discipline and enhanced transparency across the sector would further attract fresh investment from both local and foreign players.
The Coordinating Director of the Decade of Gas Secretariat, Mr Ed Ubong, said the approved plan to clear gas-to-power debts showed commitment from President Tinubu to address structural weaknesses across the value chain.
“This decision underlines the Federal Government’s determination to clear legacy liabilities and gives gas producers the confidence that supplies power generation will be honoured.
“It could unlock stalled projects, revive investor interest and rebuild momentum behind Nigeria’s transition to a gas-driven economy,” said Ubong.
