President Bola Tinubu has given the green light for the Federal Government to wipe out N185 billion in overdue payments to natural gas suppliers, a move officials say could finally break the cycle of blackouts that has frustrated homes and factories for years.
The decision was sealed on Wednesday during a meeting of the National Economic Council (NEC), chaired by Vice-President Kashim Shettima, and announced on Thursday by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo.
For years, gas producers have been short-changed on invoices for the fuel they pump to electricity plants. Cash-strapped and distrustful, many simply throttled supply or refused to drill new wells. The result? Power plants sitting idle while Nigerians roast in darkness and businesses bleed billions on diesel.
“This N185 billion settlement is a game-changer,” Ekpo told journalists. “We are clearing the air literally and figuratively. Once producers see the money isale-owo (money at the bottom), they will open the taps again.”
The payment will not come as cash on the barrelhead. Instead, the government will offset the debt against future royalty obligations – a clever bookkeeping move that keeps the treasury from bleeding dry while still giving suppliers the certainty they have begged for.
Ekpo described the intervention as the biggest confidence booster the gas-to-power chain has received in recent memory and a direct fulfilment of the president’s Decade of Gas agenda, which targets over 12 billion cubic feet of daily gas production by 2030.
Ed Ubong, Coordinating Director of the Decade of Gas Secretariat, said the approval sends a loud message: “The era of owing gas suppliers and expecting them to keep supplying is over. This single action can unlock billions of dollars in stalled upstream projects.”
Industry sources say the backlog had grown so toxic that some international oil companies were already diverting new gas volumes to the more lucrative LNG export market instead of feeding local power plants.
With the debt hurdle removed, officials are optimistic that generation companies (GenCos) will soon receive steadier, cheaper gas, fire up turbines that have been cold for months, and push Nigeria’s chronically low power output – currently hovering around 4,000–4,500 MW – significantly higher in 2026.
The move comes barely weeks after the government finalised a separate N4 trillion bond framework to settle verified legacy debts to GenCos and their own gas suppliers, showing a clear pattern of clearing the books to restart the power sector engine.
For the average Nigerian who has spent another Christmas seasoning food with generator fumes, the promise is simple: more gas in the pipes should mean more megawatts on the grid, lower diesel bills, and factories that can finally run night shifts again.
Whether the lights actually stay on will depend on how fast the money flows and whether the old habit of piling up fresh debts returns. For now, though, gas producers are smiling, DisCos are hopeful, and millions of households are daring to believe that 2026 might be the year the bulb stops blinking.
One thing is clear: after years of promises, the government has finally put serious money where the darkness is.
