Gas-producing companies have stopped the supply of natural gas to power the national grid for electricity production over the non-payment of debts accrued from previous supplies.
Dr. Joy Ogaji, Chief Executive Officer of the Association of Power Generation Businesses, revealed the latest developments in an interview on Wednesday, emphasising that the gas-producing businesses have legally notified all GenCos of the suspension of natural gas delivery.
The gas supply was abruptly suspended after the Nigerian Midstream and Downstream Petroleum Regulatory Authority reportedly directed gas producers to restrict natural gas deliveries to indebted GenCos until further notice, citing increasing indebtedness.
The situation has resulted in a nationwide electricity blackout, drastically limiting power generation across the country.
Currently, gas-fired power plants supply more than 70% of Nigeria’s electricity.
Earlier this year, Minister of Power Adebayo Adelabu said that the Federal Government would begin offsetting some of the debts it owes to power generation companies and gas providers in April.
While on a working visit to Egbin Power Plc in the Ikorodu area of Lagos State, the minister stated that he would work with the Central Bank of Nigeria to prioritise foreign exchange allocation to the power industry, claiming that this would improve the ability to ramp up capacity in terms of output generation.
“The Federal Government is now prioritising paying down on the outstanding debts, and I have assured the board and management that effective from April, we will start paying down on debts as a form of incentive to continue to have them in operation,” he stated.
While the government has paid N205 billion in debt to the GenCos in recent months, an ongoing dispute between the NMDPRA and gas producers over who should collect the 0.5% wholesale price levy imposed on petroleum products by the Petroleum Industry Act has prompted suppliers to demand payment of monies owed.
During the interview, APGC CEO Dr. Ogaji noted that all relevant authorities, including the presidency, have been aware of the current situation and are awaiting appropriate interventions.
She noted that debt, which was around N2 trillion earlier this year, has risen to N2.7 trillion.
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 percent of thermal Gencos invoices is gas.
“They have been paying a small amount. So, when they pay us nine percent, we just calculate nine percent 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.”
The supply suspension has affected the energy sector, raising fears about national energy shortages and operational instability.
Already on Wednesday, Nigerians were left in the dark after the national power grid failed again.
This is the 12th time the grid has collapsed this year. Our correspondent reported that the grid went down about 1:36 p.m. on Wednesday afternoon.
Power generation was recorded at 0.00 megawatts as of 2 p.m. The grid generated 3,087 MW at 1 p.m. At 4 a.m., generation reached a peak of 4,013 MW.
Within a week in October, the grid fell three times, resulting in outages, prompting outrage from Nigerians.
A tweet from Nigeria’s National system stated that the system crashed at approximately 2:09 p.m. on Wednesday.
“The major grid setback has occurred, and the restoration is to commence,” according to a tweet.
Distribution companies confirmed the situation in several messages to their consumers, stating that the outage was caused by a grid failure.
Jos Disco, in a statement signed by the Head of Corporate Communications, Friday Elijah, said, “The current outage being experienced within our franchise states is a result of loss of power supply from the national grid. The loss of power supply from the national grid occurred this afternoon at about 1333 hours of today, Wednesday, 11th December 2024, hence the loss of power supply on all our feeders.
“We hope to restore normal power supply to our esteemed customers as soon as the grid supply is restored to normalcy.
“Thank you for your patience and understanding as we strive to serve you better.”
Similarly, the Abuja Distribution Company stated, “We wish to inform you that a system disturbance occurred on the national grid at 1:32 pm today (Wednesday), causing a power outage across our franchise areas.
“While gradual restoration of power supply has commenced, be assured that we are coordinating closely with relevant stakeholders to restore power fully as soon as the grid is stabilised.”
Kunle Olubiyo, President of the Nigeria Consumer Protection Network, responded by calling for an impartial forensic assessment of gas-producing businesses’ debt claims, stating that the outstanding amount does not correspond to industry realities.
He also asked the government to fully privatise the power sector rather than continue to use it as a scapegoat for the sector’s shortcomings.
