Presidential reforms target longstanding obligations in the gas-to-power value chain as government pushes cleaner cooking and greater use of domestic gas resources
The Federal Government says it has settled more than ₦100 billion in longstanding gas-related debts since January 2026, as part of efforts to strengthen the gas-to-power value chain and improve electricity supply.
The Special Adviser to the President on Energy (Oil and Gas), Mrs Olu Verheijen, disclosed this on Wednesday at the Africa Interviews Sustainability Forum 2026 in Lagos.
She said the payments were made under the administration’s Presidential Power Sector Financial Reforms Programme, which seeks to address financial challenges affecting the electricity industry and improve confidence across the energy value chain.
Gas suppliers play a critical role in Nigeria’s electricity market because gas-fired power plants account for a substantial share of the country’s grid-connected generation capacity. Persistent payment delays and outstanding obligations can undermine suppliers’ ability to maintain production and deliver gas to power plants.
The settlement of legacy debts is therefore intended to improve financial flows and encourage greater reliability in gas supply, although the ultimate impact on electricity generation will depend on additional factors, including pipeline infrastructure, plant availability, transmission capacity and distribution constraints.
Government targets investment in domestic gas
Verheijen attributed the government’s progress in the energy sector to reforms introduced under President Bola Tinubu to remove investment barriers and unlock Nigeria’s natural gas resources for industrialisation, electricity generation and economic growth.
Nigeria possesses substantial gas reserves, but translating those resources into reliable energy supply requires sustained investment in production, processing, transportation and distribution infrastructure.
For manufacturers and other energy-intensive businesses, dependable gas supply can reduce exposure to alternative fuels and support more predictable production costs.
The government’s efforts to address outstanding obligations are consequently linked to a broader objective of restoring confidence among suppliers, investors and operators across the energy sector.
However, stakeholders will continue to assess the reforms by their measurable impact on gas deliveries, electricity generation and the settlement of remaining financial obligations.
LPG incentives support cleaner cooking
The presidential adviser also highlighted measures introduced since 2023 to encourage households to adopt liquefied petroleum gas (LPG) for cooking.
According to her, the government has introduced import-duty waivers and zero-rated value-added tax measures for LPG and gas cylinders to promote cleaner cooking alternatives and reduce dependence on firewood.
“A gas-rich nation cannot be comfortable while families remain stuck in the age of firewood,” she said.
The initiative is intended to make cleaner cooking fuels more accessible while reducing reliance on traditional biomass, which can expose households to harmful indoor air pollution.
The effectiveness of the policy will depend on the affordability of LPG, the availability of cylinders and distribution infrastructure, household incomes and the reliability of supply.
Economic implications
The settlement of gas debts, combined with measures to encourage cleaner cooking and increase domestic gas utilisation, reflects the government’s attempt to connect energy-sector reforms with wider economic objectives.
For the power sector, improved payment discipline could strengthen the commercial relationship between gas suppliers and electricity generators. For businesses, more dependable energy supply could support productivity and investment.
Nevertheless, sustainable improvement will require continued reforms across the entire value chain, including gas production, transmission, electricity generation and distribution.
