The Federal Government has approved the release of ₦185 billion to settle long-standing debts owed to gas producers in a move aimed at improving electricity generation across the country.

The decision, endorsed by the National Economic Council (NEC) and implemented under President Bola Tinubu’s directive, is expected to unlock gas supplies to power plants that have been constrained by years of unpaid invoices.

Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, confirmed that the debts accumulated over several years have weakened the financial capacity of gas suppliers, discouraged investment, and significantly reduced gas flow to power-generating companies. This reduction has been a major contributor to recurring national power shortages.

To address the issue, the government will implement a royalty-offset mechanism, where outstanding gas debts will be gradually cleared using future gas and oil royalty payments. Officials say the strategy restores credibility with both local and international gas suppliers while minimizing immediate pressure on government finances.

The approval forms part of the broader Decade of Gas initiative, a national plan to expand gas production and infrastructure, targeting over 12 billion cubic feet per day of supply by 2030. Government authorities believe that clearing the gas backlog will stabilize power generation, boost industrial productivity, support job creation, and enhance economic competitiveness.

Stakeholders in the energy sector have welcomed the move, noting that resolving the debt burden is essential to reviving confidence and unlocking new investment in Nigeria’s gas-to-power value chain. Visit www.jocomms.com for more news.