The Nigerian Midstream and Downstream Petroleum Regulatory Authority said that Nigeria is at the risk of an electricity blackout, and has ordered gas producers to halt gas supply to power generation companies with outstanding debts.
In an X (formerly Twitter) post on Wednesday, the Nigeria National Grid stated that the directive was prompted by the more than N2 trillion in debts owed by the Federal Government and certain GenCos to gas suppliers.
The announcement stated, “A power outage is forthcoming after the Nigerian Midstream and Downstream Petroleum Regulatory Authority instructed gas producers to stop supplying gas to indebted generation companies (GenCos).”
NMDPRA indicated that significant debts owed to producers had obstructed their capacity to maintain operations.
It urged gas consumers, especially electricity generating firms, to make prompt payments for the gas received.
“The Federal Governmentnt along with certain GenCos owes more than N2 trillion in outstanding debts to gas producers in Nigeria,” it added.
Although attempts have been made to resolve certain debts, the power sector continues to experience strain.
In June 2024, GenCos called on the Federal Government to settle unpaid electricity debts, cautioning that failure to do so could threaten the viability of electricity production.
In August, the Minister of Power, Adebayo Adelabu, declared that the government had paid N205 billion of the N1.3 trillion debt to GenCos to enhance liquidity in the electricity sector.
Adelabu mentioned that this payment formed a part of the government’s larger strategy to tackle debts owed to different sectors of the power industry.
Furthermore, in May, the government designated N130 billion to alleviate gas supply debts within the Nigerian Electricity Supply Industry.
These payments are part of continuous efforts to enhance liquidity and guarantee a consistent power supply.
Nevertheless, gas off-takers, particularly GenCos, are encouraged to make prompt payments to maintain operations and prevent additional disruptions.
