The Federal Government has paid over $120 million to offset some of the debts owed to the gas companies (GasCos), for supply of gas to run gas-fired power plants across Nigeria. The Director, Decade of Gas Secretariat, Ed Ubong, revealed this at the ongoing 7th edition of the Nigerian International Energy Summit (NIES 2024) in Abuja on Thursday. "The arrears gas producers are owed as of last year was about $ 1.3 billion. But I am pleased that between October 2023 and the end of January, the government has paid over $120 million to offset some of that money,” Mr Ubong said. Mr Ubong however said the government is also working on a framework that can mitigate most of the failures.
The country is currently suffering from low power supply owing to reduced gas supply to power-generating companies. This is as a result of the indebtedness of the Gencos to gas-producing firms.
The Minister of Power, Chief Adebayo Adelabu, recently disclosed that the crash in power generation and attendant poor supply since January was because gas suppliers stopped delivering gas for the generation of electricity due to the indebtedness of the sector to gas producers.
The country gets over 70 per cent of its electricity supply from thermal power plants that run on gas. While the rest comes from hydropower-generating plants.
“Today, we are owing a total of N1.3 trillion to the power generating companies, out of which 60 per cent is owed to gas suppliers. Today we have a legacy debt, before 2014, to the gas companies of $1.3 billion; at today’s rate, that is close to N2 trillion.
“Now, if you add N2 trillion legacy debt owed to gas companies and the N1.3 trillion being owed to GenCos, we have an inherited debt of over N3 trillion in this sector. How will the sector move forward? Nigerians deserve the right to know this.
“However, we are working underground to make sure that we resolve these issues and pay these debts either through cash injections or through guaranteed debt instruments to ensure the continuity in the generation of power,” Mr Adelabu said at the time.
