Wholesale gas producers have officially informed power generation companies (GenCos) of the suspension of natural gas supplies, a move that has led to widespread power outages across Nigeria.
Joy Ogaji, the Chief Executive Officer of the Association of Power Generation Companies, disclosed this development during an interview with Punch. She explained that the suspension was due to unpaid debts from previous transactions. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) reportedly instructed gas producers to halt gas supplies to GenCos, citing the growing outstanding debts as the reason.
This suspension has had a severe impact on electricity generation in the country, as gas-fired power plants are responsible for over 70% of Nigeria’s electricity supply. Despite the government’s recent payment of ₦205 billion towards settling some of the debts owed to GenCos, a dispute between the NMDPRA and gas producers over the collection of a 0.5% wholesale price levy required by the Petroleum Industry Act has further complicated the situation.
Gas producers have demanded payment of the outstanding debts, which have grown significantly. Earlier this year, the debt was reported to be ₦2 trillion, but it has now escalated to ₦2.7 trillion. Ogaji emphasized that all relevant authorities, including the presidency, have been informed of the ongoing crisis, and the necessary interventions are awaited.
She said, “It is no longer a matter of NMDPRA giving a directive. They have already stopped the supply of gas to power-generating companies.
“They (gas suppliers) have halted the supply. They have already informed our gencos that they are not going to be supplying gas anymore until what is outstanding is settled and it didn’t happen today.
“We have told the Nigerian Electricity Regulatory Commission, they are already aware of the situation. There is nobody who would say they are not aware; the minister is aware, and the presidency is aware.
“The total debt has now increased to over N2.7tn and you know that 70 per cent of thermal Gencos invoice is gas.
“They have been paying a small amount. So, when they pay us nine per cent, we just calculate nine per cent of our gas invoice and send it to the gas supplier because that is the only way to survive. We are all sharing in the poverty that NBET is giving us.”
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