FG Plans Gas Royalties Swap to Cut ₦2.7tr Power Debt

The Federal Government is weighing a plan to allow gas producers offset the power sector’s ₦2.7 trillion debt through their royalty payments.

Under the proposed arrangement, instead of remitting royalties directly to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), gas companies would withhold equivalent sums as part of a gradual credit settlement across the power sector value chain.

Officials familiar with the talks said the option is aimed at easing the financial burden on gas suppliers, many of whom are struggling with huge unpaid invoices from power generation companies.

The move, if adopted, could stabilise gas supply to power plants, reduce pressure on government finances, and restore investor confidence in the electricity market.

Stakeholder consultations are ongoing, with modalities for implementation expected to be unveiled in the coming weeks.