The Bola Ahmed Tinubu administration has approved the settlement of N185 billion in long-standing debts owed to natural gas producers, as part of efforts to revitalise the gas sector and stabilise power generation nationwide.

The payment, authorised by President Bola Tinubu and endorsed on Wednesday by the National Economic Council (NEC), chaired by Vice-President Kashim Shettima, is regarded as one of the most significant interventions in Nigeria’s energy sector in recent years.

In a statement on Thursday, quoted by the News Agency of Nigeria (NAN), the Minister of State for Petroleum Resources (Gas), Dr. Ekperikpe Ekpo, said clearing the debts would bring wide-ranging benefits, starting with the restoration of investor confidence

He explained that the N185 billion arrears, accumulated from past gas supply obligations, had strained producers’ cash flow, limited operations, and discouraged further exploration and production.

According to him, the backlog had also reduced gas supply to power plants, worsening electricity shortages nationwide. The approved settlement will be executed through a royalty-offset arrangement designed to reassure both domestic and international suppliers who have repeatedly raised concerns about government indebtedness.

The Minister described the approval as a “decisive step towards revitalising Nigeria’s gas sector and strengthening its power-generation capacity in a sustainable manner.”

He stated that the intervention aligned with the Decade of Gas initiative, which aims to unlock more than 12 billion cubic feet per day (bcf/d) of gas supply by 2030.

“Settling the debts is crucial to rebuilding trust between the government and gas producers, many of whom have withheld or slowed new investments due to uncertainty over payments,” he said.