Gas Shortage Threatens Deeper Power Crisis In Nigeria

Gas Supply Shortfall Raises Concerns Over Power Availability

NIGERIA’S electricity supply crisis may worsen in the coming weeks as gas producers scale back deliveries to thermal power plants, raising fears of prolonged blackouts across the country.

Industry data from the Nigerian Independent System Operator (NISO) shows that thermal power plants require about 1,629.75 million standard cubic feet of gas per day to operate at optimal capacity. However, as of February 23, 2026, actual supply stood at roughly 692 million standard cubic feet per day, representing less than 43 percent of the required volume.

The sharp supply gap has already begun to affect electricity generation, forcing distribution companies to intensify load shedding across their franchise areas.

Mounting Debt Crisis Behind Gas Supply Cuts

The Chief Executive Officer of the Association of Power Generation Companies (APGC), Joy Ogaji, said the drop in gas supply is directly linked to mounting debts across the electricity value chain.

Speaking during an interview on Fresh FM in Ibadan, Ogaji explained that generation companies are struggling because payments for electricity generated have not been fully settled since the sector’s privatisation.

She blamed the situation largely on the failure of the Nigerian Bulk Electricity Trading Plc (NBET) to fully pay generation companies for electricity supplied to the national grid.

According to her, the government currently owes generation companies about ₦6.8 trillion, with approximately 70 percent of the debt tied to gas-fired power plants.

Gas Suppliers Owed ₦3.3 Trillion

Ogaji said a significant portion of the outstanding debt is owed to gas producers whose fuel powers most of Nigeria’s electricity plants.

“About 70 percent of whatever the government owes gas-fired power plants belongs to gas suppliers,” she said.

Industry estimates suggest that about ₦3.3 trillion of the total debt is owed directly to gas companies.

She noted that suppliers have warned generation companies that gas deliveries will no longer continue without payment.

“Gas suppliers have told us clearly that if we need gas, we must put money on the ground,” she said.

Debt Continues to Rise

Ogaji explained that the debt profile has grown steadily over the years.

Between 2015 and December 2024, the sector accumulated about ₦4 trillion in liabilities. In 2025 alone, the industry recorded a monthly revenue shortfall of about ₦200 billion, which translated to roughly ₦2.4 trillion for the year.

By early 2026, the debt had risen to ₦6.8 trillion, and projections indicate it could hit ₦7 trillion by the end of March if the payment gap continues.

The situation has left many power generation companies struggling to service bank loans obtained during the 2013 power sector privatisation.

Currency Depreciation Worsens Financial Pressure

Ogaji also noted that the depreciation of the naira has worsened the financial strain on generation companies.

During the privatisation exercise in 2013, many companies obtained loans denominated in dollars when the exchange rate was around ₦155 to one dollar.

Today’s much weaker naira has significantly increased the repayment burden for these companies.

The GenCo chief warned that the debt crisis is now directly affecting electricity generation across the country.

“It is absolutely correct to say that the debt is the reason we are experiencing widespread darkness,” she said.

Blackouts Spark Public Frustration

The drop in power supply has triggered widespread complaints from households and businesses nationwide.

In many states, electricity distribution companies have resorted to load shedding to ration the limited power available from the national grid.

Residents in several parts of Lagos recently staged protests over prolonged blackouts. Demonstrators in the Fadeyi area carried placards condemning what they described as “epileptic power supply” and rising electricity bills despite poor service.

Some protesters accused distribution companies of failing to provide prepaid meters and continuing to impose estimated billing on customers.

Businesses Struggle to Survive

Small businesses across the country say the unreliable electricity supply is pushing operating costs higher.

In Kano, artisans and traders report spending thousands of naira daily on petrol to power generators.

A welder in the Hotoro area, Musa Abdullahi, said he now spends between ₦8,000 and ₦12,000 per day on fuel just to keep his business running.

Similarly, frozen food sellers say they have lost significant stock due to prolonged outages.

DisCos Blame Gas Constraints

Electricity distribution companies have apologised to customers while attributing the worsening supply situation to gas shortages.

In a notice to customers, Ikeja Electric said the gas supply constraints affecting thermal plants have significantly reduced energy available on the national grid.

The company said the shortfall has forced operators to increase load shedding across feeders.

Similarly, Eko Electricity Distribution Company said stakeholders across the sector are working to address the gas supply challenge and restore normal electricity generation.

However, industry analysts warn that without urgent financial reforms and debt resolution, Nigeria’s power supply crisis could deepen further.