Despite grappling with a staggering N2.7 trillion legacy debt, gas companies in Nigeria have continued to keep the country’s power plants running.
According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), gas suppliers delivered 179.79 billion standard cubic feet (Bscf) of gas to power generation companies (GenCos) between January and July 2025, valued at approximately N607 billion.
This resilience, industry analysts say, underscores the critical role gas plays in stabilizing Nigeria’s electricity sector, even as liquidity challenges threaten the survival of both suppliers and power producers.
The NUPRC report revealed that gas-to-power deliveries averaged 862.86 million standard cubic feet per day (mmscf/d) in July 2025, representing a 3.48% increase from June’s 833.86 mmscf/d.
Breakdown of monthly supply shows:
January: 780.23 mmscf/d (24.19 Bscf)
February: 849.37 mmscf/d (23.78 Bscf)
March: 886.83 mmscf/d (27.49 Bscf)
April: 886.70 mmscf/d (26.60 Bscf)
May: 837.64 mmscf/d (25.96 Bscf)
June: 833.86 mmscf/d (25.02 Bscf)
July: 862.86 mmscf/d (26.75 Bscf)
Thermal power plants consumed the bulk of the gas, highlighting their dependence on steady supplies to sustain Nigeria’s fragile electricity grid.
Using the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s (NMDPRA) benchmark gas-to-power price of $2.13 per MMBtu, the 179.79 Bscf supplied translates to 186.26 million MMBtu worth approximately $396.74 million.
At an exchange rate of N1,530/$, the figure equals N607 billion.
Yet, despite the continuous supply, gas producers remain underpaid due to unsettled debts.
One major power plant reportedly owes an international oil company over N500 billion in unpaid gas bills.
The sector’s debt crisis is rooted in unpaid obligations from the Federal Government and GenCos, which together owe gas suppliers over N2.7 trillion.
In early 2024, the situation became so dire that suppliers halted deliveries, causing nationwide blackouts.
Although the government intervened, many promises remain unfulfilled.
To ease the pressure, NUPRC Chief Executive, Gbenga Komolafe, disclosed that discussions are underway to extinguish the debts through royalty credits.
Under this arrangement, gas producers’ debts could be offset against the royalties they owe the government.
“Since most of the companies that are owed pay royalties, we are exploring how such debts can be extinguished without disrupting government revenue flow,” Komolafe explained during a recent industry briefing.
Former Minister of Power and Chairman of Geometric Power, Prof. Barth Nnaji, lamented the irony of Nigeria’s energy situation.
“It is a national contradiction that a country with over 200 trillion cubic feet of proven gas reserves still struggles to supply enough gas to its power plants,” Nnaji said.
He noted that while the regulated domestic gas price for power was revised downward to $2.13/MMBtu in April 2025, actual market prices hover above $2.70/MMBtu.
This disparity, he warned, creates unsustainable strain on GenCos, worsens liquidity challenges, and fuels Nigeria’s electricity subsidy crisis, which surpassed N1 trillion in the first half of 2025.
Energy experts argue that unless Nigeria resolves its gas pricing structure and debt overhang, the sector will remain trapped in a cycle of inefficiency.
Gas producers cannot indefinitely sustain supplies without payment, while GenCos rely heavily on government subsidies and tariff shortfalls.
Analysts further warn that if gas suppliers withdraw services again, the country could plunge into prolonged blackouts, stalling economic recovery and industrial growth.
For now, the willingness of gas companies to continue supplying power plants despite massive debts is seen as a lifeline for the national grid.
But stakeholders insist the Federal Government must urgently implement a transparent debt settlement framework to avert future crises.
The supply of 180 Bscf of gas to power plants in just seven months highlights the commitment of gas producers to sustaining electricity generation in Nigeria.
However, the N2.7 trillion debt crisis remains a major threat to the sector’s survival. Until systemic issues of debt settlement, pricing disparities, and infrastructure challenges are addressed, Nigeria’s dream of reliable electricity supply will remain elusive.