The Minister of Power, Adebayo Adelabu, has proposed legislative measures to ensure that payments for natural gas in the power sector are made in naira, aiming to address challenges related to gas supply shortages.
The proposal comes after a meeting with the Minister of State for Petroleum Resources (Gas), Ekperikpo Ekpe, to discuss the shortage of gas supply to electricity generation companies across Nigeria.
Adelabu highlighted the importance of adequate gas supply for electricity generation and emphasized the need for stable and sustainable energy production.
Adelabu stated that proposing domestic gas payments in naira is a crucial step toward stability, aligning with the economy’s needs, and promoting sustainable energy production.
Leveraging his financial sector experience and contacts, he aims to advocate for legislative measures mandating naira-denominated payments for domestic gas supply, addressing payment shortfalls within the electricity sector.
Adelabu also addressed the issue of gas infrastructure vandalization, citing a 2021 NEITI report recording approximately 7,143 incidents of pipeline breakages.
Moving forward, clear contractual agreements between generation companies (GENCOs) and gas suppliers will ensure a steady gas supply to generation companies.
Recent incidents, such as the shutdown of the national electricity grid due to gas supply shortages, highlight the urgency of addressing challenges in the power sector.
Natural gas, priced in dollars for power plants, has posed challenges for local operators in making dollar payments amidst currency depreciation.
Nigeria’s vast natural gas reserves, coupled with financial constraints, have hindered its exploitation. Transitioning to naira payments and implementing caps on dollar prices are part of the government’s strategy to address these challenges.
