FG Approves Commencement of ₦185bn Gas Legacy Debt Payment 

The Federal Government has approved the payment of N185bn in outstanding debts owed to natural gas suppliers in a move aimed at easing liquidity constraints in the sector and improving electricity generation nationwide

The significant milestone was achieved as President Bola Ahmed Tinubu made strategic moves to promote upstream gas development and enhance gas-to-power generation. 

The initiative was reinforced by the National Economic Council (NEC), which approved the payment of legacy debts amounting to 185 billion naira owed to gas producers. 

This decision marks a turning point for the country’s gas industry and the broader power generation landscape.

As a background of Nigeria’s Gas Sector, Nigeria boasts substantial natural gas reserves, making it one of the leading gas-rich nations in Africa. 

Despite this potential, the sector has faced persistent challenges, including inadequate infrastructure, regulatory hurdles, and financial constraints. 

One significant bottleneck has been the accumulation of unpaid debts to gas producers, which has hampered further investments and development in upstream gas activities.

As a matter of fact the legacy debts of 185 billion naira refer to longstanding financial obligations the government owes to gas producers for previous supplies.

 These debts have negatively impacted the cash flow and operational capacity of gas companies, discouraging further exploration and production. 

The inability to settle these debts has also led to reduced gas supply for power generation, contributing to Nigeria’s power shortages and unreliable electricity supply.

However, the NEC meeting held on December 3, 2025, stakeholders recognized the urgent need to address these financial liabilities. The council’s approval to pay up the legacy debts is expected to restore confidence among gas producers, unlock new investments, and improve gas supply for power generation. 

This move demonstrates the government’s commitment to resolving critical issues in the energy supply chain and fostering a more robust and sustainable energy sector.

President Tinubu’s Vision for Gas Development

President Bola Ahmed Tinubu’s administration has consistently emphasized the importance of leveraging Nigeria’s gas resources for economic growth.

By prioritizing upstream gas development, the government aims to increase domestic gas production, stimulate job creation, and boost revenue. The focus on gas-to-power generation aligns with efforts to improve electricity access and reliability, which are crucial for industrial growth and improving quality of life for Nigerians.

Expected Impact Restoration of Trust: Paying off debts will rebuild trust between the government and gas producers, encouraging further investment.

Increased Gas Production: Financial stability for producers will lead to expanded upstream activities and higher gas output. Enhanced Power Generation: More gas available for power plants will improve electricity supply and reliability nationwide.

Economic Growth: Reliable energy is vital for industrialization, job creation, and overall economic development.

Attracting Investment: Improved financial discipline and sector stability will attract both local and foreign investors.

The NEC’s approval to pay 185 billion naira in legacy debts via royalty offset is a decisive step towards revitalizing Nigeria’s gas sector and strengthening its power generation capacity in a sustainable manner. 

President Tinubu’s leadership in this area signals a new era of energy sector reform, with the potential to transform Nigeria’s economy and deliver tangible benefits to its citizens. This is aligned with Nigeria Decade of Gas program that will work with critical stakeholders to actualize this vision and unlock over 12bcfd of gas supply by 2030.

However, the Honourable Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo assured  with the latest development there will be improved gas supply for power sector 

He lauded President Bola Ahmed Tinubu’s Initiative to Boost Upstream Gas Development and Gas-to-Power Generation in Nigeria

He thanked Tinubu for accelerating Nigeria Decade of Gas Program implementation and noted that   the 154th NEC approval  of N185 bn legacy debts payment to gas producers will ensure uninterrupted gas supply to GenCos.