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The Federal Government of Nigeria has taken a decisive step to revitalise the gas industry and stabilise power generation after President Bola Tinubu authorised the settlement of N185 billion in long-standing debts owed to natural gas producers.
The move, endorsed on Wednesday, December 3, 2025, by the National Economic Council (NEC) headed by Vice-President Kashim Shettima, marked one of the most significant interventions in Nigeria’s energy sector in recent years.
The Minister of State, Petroleum Resources (Gas), Dr Ekperikpe Ekpo, in a statement on Thursday, December 4, said clearing the arrears would deliver wide-ranging benefits, beginning with restoring investor confidence in the sector.
It will be recalled that the N185 billion legacy debts, a longstanding government obligation to gas producers for past supplies, had strained cash flow and hindered operations.
The debts had discouraged further exploration and production, and reduced gas supply for power generation, thereby worsening Nigeria’s power shortages and unreliable electricity supply.
The payment to be executed through a royalty-offset arrangement, is expected to restore confidence among domestic and international gas suppliers who have long expressed concern about persistent indebtedness in the sector.
Ekpo, however, described the approval as a “decisive step towards revitalising Nigeria’s gas sector and strengthening its power-generation capacity in a sustainable manner.”
He praised Tinubu’s leadership, stating 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 gas 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 give gas producers the confidence that supplies to 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.
By Emmanuella Anokam
