NMDPRA denies claims of directing wholesale gas suppliers to halt gas supply to GENCOs

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has refuted claims that it issued a directive instructing wholesale gas suppliers to halt gas supply to power-generating companies (GENCOs) over payment defaults.

The controversy began with a tweet from the Nigeria National Grid on Wednesday, claiming an imminent electricity blackout due to NMDPRA’s alleged directive to halt gas supply to indebted GENCOs.

The tweet linked the action to over N2 trillion in legacy debts owed by the federal government and GENCOs to gas producers, which it said hindered operations.

In a statement on Wednesday, NMDPRA categorically denied the false claims that it had directed gas suppliers to halt deliveries to power companies. The Authority clarified that these claims had no basis in any official communication, particularly during a recent stakeholders’ engagement in Lagos, which focused on the wholesale supply license under the Petroleum Industry Act (PIA) 2021.

“The publication circulating is completely unfounded,” the statement read in part.

It added, “There was no such directive issued at our recent stakeholders’ engagement, nor was it discussed in any of our communications. We want to assure stakeholders that all efforts are being made to ensure the continuous and uninterrupted supply of natural gas to power generating companies.”

The Authority further reassured all stakeholders and the public that the distribution and supply of natural gas, along with other petroleum products, would remain seamless, especially as the nation enters the festive season and prepares for the year 2025.

What you should now

Nigeria’s power sector continues to face significant challenges, largely due to underinvestment and liquidity issues.

In June 2024, Power Generation Companies (GenCos) called on the Federal Government to settle outstanding electricity debts, warning that the non-payment of over N2 trillion could threaten the sustainability of electricity generation for Nigerians.
In response, the Minister of Power, Adebayo Adelabu, announced in August that the government had settled N205 billion of the N1.3 trillion owed to GenCos, aiming to improve liquidity in the sector. He emphasized that this payment was part of the debt owed across various segments of the power industry.
Earlier, in May, the government allocated N130 billion to address part of the N1.3 trillion gas supply debts in the Nigerian Electricity Supply Industry (NESI).

These ongoing debt settlements are a key part of the government’s strategy to enhance liquidity and ensure a more reliable power supply.

SOURCE: NAIRAMETRICS