Nigeria’s electricity supply faces a major threat as gas suppliers halt fuel to thermal power plants over N3.3tn owed by power generation companies, worsening blackouts nationwide

Nigeria’s ongoing electricity shortages could intensify in the coming weeks as gas suppliers threaten to halt supply to thermal power plants over an estimated N3.3tn debt owed by power generation companies (GenCos), industry sources warned.

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The Chief Executive Officer of the Association of Power Generation Companies, Dr. Joy Ogaji, disclosed that the mounting debt across the power value chain is pushing the sector toward a critical crisis, with nationwide electricity supply already below 4,000 megawatts in recent weeks.

Data from the Nigerian Independent System Operator shows that as of Tuesday, the country’s 11 distribution companies were sharing only 3,053MW, making reliable supply across franchise areas impossible.

Thermal power plants, which account for roughly 70% of electricity generation, require 1,629.75 million standard cubic feet of gas per day but currently receive only 692.00 mmscf—less than 43% of the required volume.

Ogaji explained that the crisis stems from unpaid obligations by the Nigerian Bulk Electricity Trading Plc (NBET) to GenCos since the 2013 privatisation of the sector.

“The government currently owes generation companies about N6.8tn, with roughly 70% relating to thermal plants,” she said, adding that gas suppliers are owed approximately N3.3tn.

“Gas is not available because the gas suppliers have told us that if we need gas, we need to put money on the ground to get gas in the pipe. We owed them a lot of money,” Ogaji stated.

The debt has also left GenCos struggling to service loans obtained in U.S. dollars during privatisation, with the sharp naira depreciation worsening financial pressures.

Despite Nigeria’s proven 200 trillion cubic feet of natural gas reserves, the country continues to face gas supply constraints that threaten electricity generation.

Barth Nnaji, Chairman of Geometric Power, called the situation “a national contradiction,” noting that gas-rich Nigeria struggles to meet domestic power needs.

He also highlighted that GenCos often pay higher market rates for gas than the regulated domestic price, further straining the sector.

Meanwhile, the Ministry of Power confirmed that the Federal Government is addressing the situation in coordination with the Minister of State for Petroleum (Gas), Ekperikpe Ekpo.

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Industry stakeholders warn that unless the N6.8tn debt owed to generation companies is urgently cleared and gas supply restored, households and businesses nationwide may face worsening blackouts, threatening economic activities and daily life.