Nigeria Faces Worsening Power Crisis as Gas Suppliers Halt Supply Over N3.3tn Debt

By Emmanuel Kwada

Nigeria’s electricity supply is at risk of severe deterioration in the coming weeks following a decision by gas suppliers to stop providing fuel to thermal power plants due to an outstanding debt of approximately N3.3 trillion.

Dr. Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies (APGC), revealed the development in a recent interview on Fresh FM. She warned that the escalating debts across the power sector value chain are driving the industry toward a major breakdown, potentially leading to widespread blackouts.

According to Ogaji, gas suppliers have formally notified generation companies (GenCos) that they will no longer deliver gas until payments are cleared. She explained that around 70% of the funds owed to gas-fired power plants go to gas suppliers and transporters, equating to roughly N3.3 trillion out of about N4.76 trillion linked to thermal generation.

The broader debt picture is even more alarming. Ogaji noted that legacy debts from 2015 to December 2024 stood at N4 trillion. With monthly shortfalls of about N200 billion in 2025 adding N2.4 trillion, the total reached N6.4 trillion by the end of last year.

By March 2026, the figure has climbed further to around N6.8–7 trillion, with projections warning it could hit N8.8 trillion by year-end if unresolved.

This payment crisis has already triggered ongoing gas shortages. Recent reports from the Nigerian Independent System Operator (NISO) show thermal plants receiving only about 40% of required gas volumes—around 650–700 million standard cubic feet daily against a need of over 1,600 mmscf.

This has forced multiple generating units to shut down, recently dropping national grid output to as low as 3,940 MW, with further reductions of hundreds of megawatts reported.

The situation echoes earlier disruptions, including a similar gas supply halt in early 2024 that caused prolonged outages. Thermal plants, which form the backbone of Nigeria’s power grid, continue to struggle with liquidity issues, maintenance delays, and inability to secure fuel amid unpaid invoices.

Manufacturers and households are bearing the brunt, with many turning to expensive diesel generators as grid supply remains erratic and far below national demand.

Industry stakeholders have repeatedly called on the federal government for urgent intervention, including accelerated debt settlement plans and sustainable financing mechanisms to restore gas flows and stabilize electricity generation.

No immediate official response from the Ministry of Power or relevant agencies has been issued regarding the latest supply cut-off announcement.