Nigeria’s electricity crisis could worsen as unpaid gas debts mount, threatening the supply of fuel to power-generating companies.
Industry stakeholders have warned that the power sector’s financial problems, weak infrastructure and inadequate investment in gas production are undermining electricity generation.
The concerns emerged at the sixth annual conference of the Power Correspondents Association of Nigeria in Abuja.
Bashiru Adoke, General Manager of Gas Commercial at the Nigerian National Petroleum Development Company, said the electricity market owes gas suppliers more than ₦630bn for power already generated and consumed.
He explained that generating companies receive insufficient payments for electricity supplied. This makes it difficult for them to settle their gas bills and maintain fuel deliveries.
“There is no robust mechanism for payment of gas supply, because the proceeds from the market is not even enough to pay for gas supply,” Adoke said.
He added that gas accounts for between 60 and 75 per cent of electricity production costs, while payments for generated electricity cover only about 40 per cent of monthly invoices.
Government interventions failing to stop fresh debts
Adoke warned that occasional government payments towards outstanding debts would not resolve the crisis without a sustainable payment system.
He explained that previous interventions targeted legacy debts accumulated between 2015 and 2025. However, new obligations have continued to build up.
“The intervention by the government, which is on the legacy debt, is from 2015 to 2025. What about the debt from 2025? It is already accumulating and it is not being addressed. It is a problem,” he said.
According to him, the government must establish a reliable payment mechanism to prevent further disruptions across the gas-to-power value chain.
He also called for increased investment in non-associated gas. This would reduce dependence on gas produced alongside crude oil, which could be affected by disruptions in oil production.
Adoke acknowledged that the government had introduced incentives to attract investment in gas projects. However, he maintained that more capital was needed.
High electricity tariffs could push consumers off the national grid
The NDPHC official also raised concerns about rising electricity costs and their impact on consumers.
He warned that expensive tariffs could encourage households and businesses to abandon the national grid for solar power and other independent energy sources.
“I am scared for this national grid because by the time everybody abandons it and uses solar, I don’t know what the grid will be doing,” he said.
His warning comes as Nigerians continue to experience unreliable electricity supply and frequent power disruptions.
Transmission infrastructure faces additional challenges
Meanwhile, the Transmission Company of Nigeria identified inadequate generation as a major obstacle to improving electricity transmission.
Its General Manager of Engineering, Mojeed Akintola, said the company could only transmit the electricity produced by generating stations.
He said TCN was expanding its capacity through additional transformers and transmission lines. However, right-of-way disputes and vandalism continued to delay projects.
The concerns follow a November 5 statement by the Nigerian Independent System Operator, which attributed reduced grid generation partly to inadequate gas supply to thermal power plants and lower water inflows into hydroelectric reservoirs.
However, the Nigerian National Petroleum Company Limited later said its gas transportation network remained available to deliver fuel to power stations.
NNPC stressed that gas production, commercial supply arrangements and actual deliveries to individual power plants must be assessed separately.
The disagreement highlights the challenges across Nigeria’s electricity value chain, where gas supply, payments, generation and transmission all affect the power available to consumers.
Stakeholders warn that without a sustainable financial system and stronger infrastructure, Nigeria’s electricity supply problems could persist.
