Nigeria’s electricity crisis could worsen as mounting unpaid debts to gas suppliers continue to threaten fuel deliveries to power generation companies, raising concerns about the stability of electricity supply across the country.

Industry stakeholders have warned that the failure to establish a sustainable payment system for gas suppliers, inadequate investment in gas production and weak electricity infrastructure are undermining efforts to improve power generation.

The concerns were raised at the sixth annual conference of the Power Correspondents Association of Nigeria in Abuja, where participants identified financial and structural challenges threatening the country’s ambition to achieve a $1tn economy by 2030 through reliable and affordable electricity.

The warning comes amid renewed disruptions to electricity supply nationwide. On November 5, the Nigerian Independent System Operator attributed declining grid generation to insufficient gas supply to thermal power stations and reduced water inflows into hydroelectric reservoirs, resulting in shorter electricity supply hours and increased load shedding.

However, the Nigerian National Petroleum Company Limited subsequently maintained that its gas transportation network remained available, arguing that gas production, commercial supply arrangements and actual deliveries to power stations needed to be examined separately.

Speaking at the conference, the General Manager, Gas Commercial, Nigerian National Petroleum Development Company, Bashiru Adoke, described the gas-to-power crisis as solvable but stressed that addressing it would require sustained investment and a dependable payment structure.

He identified the inability of electricity market operators to adequately pay for gas supplied to generating companies as one of the major obstacles to stable electricity generation.

According to him, generation companies receive insufficient payments for the electricity they produce, making it difficult for them to settle outstanding gas invoices and maintain consistent fuel supplies.

Adoke explained that gas accounts for approximately 60 to 75 per cent of the production costs of electricity generation, while payments received by operators remain inadequate to cover their obligations.

He disclosed that the market currently owed gas suppliers more than ₦639bn for electricity already generated and consumed by Nigerians.

He warned that repeated government interventions to settle outstanding debts would not resolve the crisis unless a sustainable mechanism was introduced to ensure that suppliers received payment for gas delivered.

The NDPHC official further explained that while the government was addressing legacy debts accumulated between 2015 and 2025, fresh liabilities arising from subsequent electricity transactions were already building up without adequate attention.

He also called for increased investment in non-associated gas production, noting that excessive dependence on gas produced alongside crude oil could expose electricity generation to disruptions whenever oil production declined.

Although the Federal Government had introduced incentives through executive orders to attract investment into the gas sector, he maintained that additional capital was needed to expand production.

Adoke also expressed concern that high electricity tariffs could encourage more consumers to abandon the national grid in favour of solar energy and independent power generation, potentially threatening the grid’s long-term sustainability.

Meanwhile, the General Manager, Engineering, Transmission Company of Nigeria, Mojeed Akintola, identified inadequate electricity generation as a major constraint to transmission capacity.

He explained that the transmission company could only distribute the volume of electricity made available by generating stations, adding that efforts were ongoing to expand transmission capacity through the installation of additional transformers and construction of new power lines.

However, he identified right-of-way disputes and vandalism as significant challenges delaying the completion of transmission projects.

The stakeholders maintained that resolving the financial challenges across the electricity value chain, alongside increased investment in gas production and infrastructure, would be critical to improving power generation and ensuring more reliable electricity supply nationwide.