By Suara Sherif
Nigeria’s electricity supply is facing renewed pressure as mounting unpaid obligations to gas suppliers expose financial and structural weaknesses across the country’s power sector, raising concerns about the ability of generating companies to sustain operations and deliver reliable electricity to consumers.
According to a report by The Punch published on November 13, 2026, industry stakeholders warned that the electricity market owes gas suppliers more than ₦630bn for gas used in generating electricity. The warning was issued at the sixth annual conference of the Power Correspondents Association of Nigeria in Abuja, where participants identified unpaid obligations, inadequate investment in gas production and weak transmission infrastructure as major obstacles to stable electricity supply.
The General Manager of Gas Commercial at the Nigerian National Petroleum Development Company, Bashiru Adoke, said the financial imbalance between electricity generation companies and gas suppliers was making it increasingly difficult for operators to sustain the flow of fuel required by thermal power stations.
He explained that gas accounts for approximately 60 to 75 per cent of electricity generation costs, while the payments received by generating companies for electricity supplied are often insufficient to cover their operational expenses and settle outstanding gas invoices.
According to Adoke, the absence of a reliable payment mechanism across the electricity value chain means that suppliers are left waiting for payments even after delivering the gas required to produce electricity. He warned that repeated government interventions to settle outstanding obligations would provide only temporary relief if new debts continued to accumulate.
His concerns point to a wider liquidity problem within Nigeria’s electricity market, where financial obligations move through several interconnected operators, from gas producers and suppliers to generating companies, market operators and distribution companies.
When payments are delayed at one stage, the consequences can extend across the entire chain. Gas suppliers may face difficulties sustaining deliveries, generating companies may struggle to meet operational costs, and electricity production can come under additional pressure.
The situation is particularly significant because thermal power stations account for a substantial share of Nigeria’s grid electricity generation. Their dependence on natural gas makes the reliability of gas production, commercial agreements, transportation and payments essential to maintaining electricity supply.
However, the challenges confronting the sector are not limited to unpaid invoices.
The Nigerian Independent System Operator had earlier attributed a decline in national grid generation recorded on November 5 to inadequate gas supply to thermal power stations and reduced water inflows into hydroelectric reservoirs. The combination of these constraints placed additional pressure on available electricity generation and contributed to shorter supply hours and increased load shedding.
The Nigerian National Petroleum Company Limited subsequently offered a clarification, stating that its gas transportation network remained available to support deliveries to power-generating stations nationwide.
In its November 6 statement, the company said its operational records did not indicate transportation-related constraints within its network that could explain the decline in electricity generation. It also stressed that gas production, commercial supply arrangements and actual deliveries to individual power stations must be examined separately when assessing the causes of supply shortages.
The differing explanations underline the complexity of the gas-to-power challenge. Having gas transportation infrastructure available does not automatically guarantee that sufficient gas is produced, commercially supplied, delivered to generating stations and converted into electricity.
Adoke also called for increased investment in non-associated gas production, which is extracted independently of crude oil production. He warned that excessive reliance on associated gas could expose electricity generation to disruptions linked to changes in oil production.
For businesses, the implications of an unreliable electricity supply extend beyond inconvenience. Manufacturers, small businesses and service providers depend on predictable energy to maintain production schedules, preserve goods, operate equipment and control operating expenses.
Where grid electricity becomes unreliable, businesses may have to rely more heavily on alternative sources of power, increasing the cost of production and potentially affecting the prices of goods and services.
Households also face the consequences through disrupted daily activities and additional spending on alternative electricity arrangements.
The Federal Government has already taken steps to address some of the financial challenges confronting the sector. In October, the Minister of Power disclosed that ₦1.23tn had been paid out of the ₦3.3tn debt owed to electricity generation companies under the government’s debt-settlement efforts.
Separately, the Nigerian Bulk Electricity Trading Plc commenced a ₦728.979bn settlement programme for participating generation companies and their associated gas suppliers through cash and non-cash bonds.
These interventions represent efforts to address accumulated obligations, but the latest warning from industry stakeholders suggests that settling historical debts alone may not resolve the sector’s financial difficulties.
The central challenge is establishing a payment structure that ensures electricity market operators can meet their obligations as they arise, rather than allowing fresh debts to accumulate after each round of government intervention.
The transmission network presents another obstacle. At the Abuja conference, the Transmission Company of Nigeria’s General Manager of Engineering, Mojeed Akintola, said the company could only transmit the electricity generated by power stations. He identified inadequate generation, vandalism and right-of-way disputes as challenges affecting the expansion and effectiveness of transmission infrastructure.
This means that improving electricity supply requires more than increasing gas production or settling outstanding invoices. Generation capacity, fuel availability, transmission infrastructure, commercial arrangements and payment discipline must work together to deliver reliable power.
For Nigeria, where electricity remains essential to industrial expansion, investment and household welfare, the consequences of failing to address these interconnected challenges could extend well beyond the power sector.
The latest warning has therefore renewed attention on a fundamental question: how can the country translate its energy resources and existing infrastructure into dependable electricity for its growing economy?
Until a sustainable payment mechanism is established and investment across the gas-to-power value chain improves, the cycle of outstanding debts, operational pressure and unreliable electricity supply may remain difficult to break.
