The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, on Thursday revealed that the Federal Government has taken a major step to boost the gas sector and ensure stable power supply, following President Bola Tinubu’s approval to clear N185 billion in longstanding debts owed to natural gas producers.

In a statement from his spokesman, Louis Ibah, Ekpo noted that the decision, endorsed on Wednesday by the National Economic Council chaired by Vice President Kashim Shettima, represents one of the most significant interventions in Nigeria’s energy sector in recent times.

The statement noted that the N185 billion legacy debts—longstanding government obligations to gas producers for past supplies—have strained cash flow, hampered operations, discouraged further exploration and production, and limited gas availability for power generation, exacerbating Nigeria’s electricity shortages and unreliable power 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,” the statement announced.

Ekpo called the approval a “decisive step in revitalising Nigeria’s gas sector and sustainably boosting its power-generation capacity.” He lauded President Tinubu’s leadership, noting that the move aligns with the Decade of Gas initiative, which targets unlocking over 12 billion cubic feet of gas per day by 2030.

He emphasized that settling the arrears will bring far-reaching benefits, starting with restoring investor confidence. Ekpo said clearing these debts is critical to rebuilding trust with gas producers, many of whom have postponed or reduced new investments amid uncertainties over payments.

Ekpo explained that greater financial stability will stimulate upstream activities by accelerating exploration and production, ultimately increasing 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,” he said.

The gas minister highlighted that these benefits are expected to drive broader economic growth, with reliable energy supporting industrialisation, job creation, and competitiveness. He added that improved fiscal discipline and greater transparency in the sector would further attract new investments from both local and international players.

The Coordinating Director of the Decade of Gas Secretariat, Mr. Ed Ubong, stated that the approved plan to settle gas-to-power debts sends a strong signal of President Tinubu’s commitment to addressing structural weaknesses across the energy 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,” Ubong was quoted as having said.

It is recalled that in 2024, gas producers halted supplies to power plants over unpaid debts. The settlement of these obligations is expected to restore gas supply, boosting power generation capacity, which has been stagnant at around 5,000 megawatts for several months.