Nigeria’s power crisis is worsening as rampant gas flaring continues to deprive the country of a staggering 4,100 gigawatt-hours (GWh) of electricity, exacerbating an already fragile energy sector.
The country’s power-generating companies (GenCos) are struggling with limited gas supply and mounting debts, further crippling electricity production. The Executive Secretary of the Association of Power Generation Companies, Dr. Joy Ogaji, revealed that GenCos have received only 27% of payments for their 2024 invoices, leaving a massive shortfall of 63%, not including a lingering N2.5 trillion debt from 2015 to December 2023.
“Payment is our major challenge, and it directly affects gas supply,” Ogaji stated. “Electricity is poorly paid for, and since gas is not a free product, this issue persists.”
Despite the crisis, the Nigerian Bulk Electricity Trading (NBET) Plc has remained silent on why payments to GenCos are consistently delayed.
Sabotage, Debt, and Policy Gaps Worsen Gas Supply
Beyond financial struggles, infrastructure sabotage is also hindering gas flow. The Chief Executive Officer of the Centre for Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, pointed out that vandalism in the Niger Delta is causing major disruptions.
“There have been incidents of pipeline vandalism, which amount to economic sabotage,” Yusuf said. “But the bigger issue remains illiquidity. GenCos simply do not have the financial capacity to settle debts owed to gas companies.”
As of 2024, Nigeria’s outstanding electricity debt reportedly stands at N2.7 trillion, highlighting a fundamental liquidity problem within the power sector.
“We need a sustainable framework to ensure financial stability in the electricity supply chain. Until we address low tariffs, technical losses, and commercial inefficiencies, this crisis will persist,” Yusuf added.
Households and Businesses Struggle Amid Power Shortages
The consequences of poor power supply are evident nationwide, with businesses and households bearing the brunt of frequent blackouts. Many Nigerians have resorted to generating their own electricity at exorbitant costs, with petrol prices exceeding N900 per liter and diesel surpassing N1,000 per liter.
Mazi Colman Obasi, National President of the Oil and Gas Services Providers Association of Nigeria (OGSPAN), acknowledged slight improvements in certain areas due to consumer classification into different bands but emphasized that erratic power remains a major challenge.
Ending Gas Flaring Requires Major Investments
Experts believe that solving the power crisis requires massive investment in gas infrastructure. Dr. Emmanuel Udofia, Managing Director of Suneses Energy Limited, stressed that while the government has introduced various initiatives to curb gas flaring by 2030, success depends on boosting investment, improving gas pricing, and expanding domestic demand.
“Ending gas flaring isn’t just about policy—it requires substantial financial commitment to harness flared gas for productive use,” Udofia said.
As Nigeria struggles with persistent power shortages, stakeholders are calling for urgent reforms to stabilize the electricity sector and secure sustainable energy for the future.
