The Nigerian energy sector faces its most significant crisis in recent years as wholesale gas-producing companies have abruptly halted the supply of natural gas to power generation companies.
This development, triggered by the non-payment of substantial debts, has plunged the nation into widespread electricity outages, sparking outrage and concerns about energy security.
Dr. Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies (APGC), confirmed the suspension in an exclusive interview, stating that gas producers had formally notified power generation companies (GenCos) of their decision.
This directive follows an order from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) instructing gas suppliers to stop deliveries to indebted GenCos.
The total debt owed by GenCos, estimated at over ₦2.7 trillion, has skyrocketed from ₦2 trillion earlier this year.
This debt crisis is compounded by disagreements between the NMDPRA and gas producers over the collection of a 0.5% wholesale price levy mandated by the Petroleum Industry Act.
Despite the Federal Government's payment of ₦205 billion in recent months, the funds fall short of resolving the crisis.
“We have told all relevant authorities, including the presidency and the Nigerian Electricity Regulatory Commission (NERC), about this issue,” Dr. Ogaji stated. “Gas suppliers have halted supply until the debts are settled, and the situation continues to worsen.”
The sudden halt in gas supply has led to the collapse of the national grid for the 12th time this year, plunging the country into darkness on Wednesday afternoon.
Power generation dropped from 3,087 MW at 1:00 PM to zero by 2:00 PM, exacerbating concerns about operational stability.
Electricity distribution companies confirmed the outage, assuring consumers that restoration efforts were underway.
However, the outages have significantly disrupted businesses and daily life across Nigeria, with many expressing frustration at the frequent grid failures.
Earlier this year, Minister of Power, Adebayo Adelabu, announced measures to address the debt crisis, including liaising with the Central Bank of Nigeria to prioritise foreign exchange allocation for the power sector. However, stakeholders argue that these interventions have not sufficiently addressed the core issues.
Consumer rights advocates, including Kunle Olubiyo, President of the Nigeria Consumer Protection Network, have called for an independent forensic audit of the debt claims.
“The outstanding debts need to be verified, and the power sector should operate as a business with accountability and enforcement mechanisms,” Olubiyo remarked. He also urged the government to fully privatise the sector to mitigate inefficiencies.
As the energy sector grapples with this crisis, stakeholders are calling for immediate action, including debt restructuring, enhanced regulatory oversight, and the adoption of sustainable energy policies.
Meanwhile, the nationwide blackout serves as a stark reminder of the fragile state of Nigeria's power infrastructure and the urgent need for systemic reforms.