25.1 C
Saturday, July 13, 2024

FG clears $120m gas debt, yet power sector challenges persist

Federal Government Addresses Gas Indebtedness Amid Lingering Power Supply Woes

Must read

Nigeria has made a partial payment of $120 million towards its staggering $1.3 billion debt owed to gas companies, marking a significant step in addressing the ongoing crisis gripping the nation’s power sector. However, challenges persist as the industry grapples with financial burdens and operational deficiencies.

Chief Adebayo Adelabu, the Minister of Power, recently attributed the decline in power generation since January to the cessation of gas supply by several companies, citing the sector’s indebtedness to gas producers as the primary cause.

Gas-fired power plants, which account for over 70 per cent of Nigeria’s electricity generation, have experienced disruptions due to reduced gas supplies, exacerbating the country’s power deficit.

Speaking at the 7th Nigeria International Energy Summit, Ed Ubong, Director of the Decade of Gas Secretariat, expressed optimism over the government’s payment of $120 million towards the outstanding gas debts. However, he underscored the need for comprehensive reforms to address systemic issues within the power sector.

The Decade of Gas Secretariat, under the Federal Ministry of Petroleum Resources (Gas), emphasized the importance of developing a framework to prevent the accumulation of substantial gas debts in the future. Ubong highlighted ongoing efforts to enhance capacity building and foster collaboration between gas and power stakeholders to ensure a sustainable energy ecosystem.

Despite progress in addressing gas indebtedness, challenges persist within Nigeria’s oil sector, particularly concerning the effective development of divested assets. Oritsemeyiwa Eyesan, Executive Vice President, Upstream at the Nigerian National Petroleum Company Limited, emphasized the need for deeper collaboration among upstream operators to overcome operational challenges and spur growth.

Eyesan underscored the importance of addressing insecurity, financial constraints, and technological limitations to optimize the performance of independent producers. She called for a collaborative approach among industry players to navigate the complexities of Nigeria’s energy landscape and drive meaningful progress.

As Nigeria navigates the complexities of its energy sector, stakeholders remain committed to exploring innovative solutions and fostering collaboration to overcome systemic challenges and unlock the nation’s vast energy potential.

More articles


Please enter your comment!
Please enter your name here

Latest article