Nationwide Blackout Looms as Gas Producers Set to Halt Supply to Gencos Over N2 trillion Debt

Nigerians could face a nationwide blackout following a directive by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to gas producers to cease gas supply to electricity generation companies (GenCos) with outstanding debts.

The NMDPRA revealed that GenCos owes over N2 trillion in legacy debts to gas producers, significantly affecting the producers’ ability to sustain operations.

Gencos in  Debt to NMDPRA

The NMDPRA cited substantial debts owed by these Generation companies, which have impacted the ability of the producers to maintain operations. The Authority urged gas off-takers, especially power generation companies, to ensure prompt payment for gas supplied.

Speaking at a stakeholder sensitization workshop on wholesale supply operations, Farouk Ahmed, CEO of the NMDPRA, highlighted the gravity of the situation.

Represented by the agency’s legal adviser, Joseph Tolorunse, Ahmed confirmed that gas producers had been instructed to suspend supplies to defaulting GenCos until payments are made.

Adding to this, Emmanuel Cofie-Spiff of Oando also disclosed that only 28% of the total gas supplied to off-takers has been paid for, leaving producers to bear an unsustainable financial burden.

Significance

If the outstanding debts remain unpaid, gas producers are expected to fully halt supplies to GenCos, crippling their ability to generate electricity. This situation poses a serious threat to the nation’s power grid, especially as Nigerians enter the festive season.

Without resolution, the country may experience minimal power supply, with the worst-case scenario being a nationwide blackout.

The NMDPRA has called for urgent intervention to prevent further disruptions and ensure a stable power supply for homes and businesses during this critical period.

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