The Federal Government says it has settled over ₦100 billion in gas debts since January 2026. The payment aims to improve electricity generation and strengthen Nigeria’s gas-to-power sector.
President Bola Tinubu’s Special Adviser on Oil and Gas, Olu Verheijen, announced the settlement. She spoke at the Africa Interviews Sustainability Forum 2026 in Lagos.
The payment forms part of the Presidential Power Sector Financial Reforms Programme. However, the government has not published a breakdown of payments to individual gas suppliers.
The settlement addresses a major challenge in Nigeria’s electricity sector. Unpaid debts have strained gas suppliers’ finances and threatened fuel deliveries to power plants.
Nigeria relies heavily on gas-fired plants for grid electricity. Therefore, steady gas supplies remain essential for power generation.
When suppliers face payment delays, they may struggle to maintain deliveries. Consequently, power plants can generate less electricity. This can worsen shortages for households and businesses.
The settlement could improve confidence among suppliers. However, its impact will depend on consistent gas deliveries and better payment systems.
Verheijen also reported an increase in Nigeria’s average daily gas production. Output rose from approximately seven billion cubic feet to eight billion cubic feet.
She also highlighted four final investment decisions on gas projects in less than two years. These developments could support future investment and production growth.
Nigeria holds more than 200 trillion cubic feet of proven gas reserves. However, infrastructure gaps and investment constraints continue to limit the sector’s potential.
The government is also addressing outstanding debts across the electricity sector. The Nigerian Bulk Electricity Trading company has begun settling obligations to power generation companies and associated gas suppliers.
That programme uses a separate, bond-backed debt-reduction scheme.
Meanwhile, Nigeria needs investment in generation, transmission and distribution. Plans to expand electricity capacity towards 20,000 megawatts would require substantial, phased funding.
Separate renewable energy initiatives also target underserved public institutions. These include federal universities, teaching hospitals and security agencies.
The projects aim to reduce dependence on unreliable grid electricity. They could also lower institutions’ reliance on expensive diesel generators.
The ₦100 billion settlement could help strengthen gas deliveries to power plants. However, lasting improvements require better coordination between gas suppliers and electricity companies.
The government must also prevent new debts from accumulating. Otherwise, recurring payment problems could undermine progress.
Ultimately, Nigerians will judge the reforms by their results. The key measures are increased electricity generation, more reliable supply and fewer disruptions to homes and businesses.
