NMDPRA Refutes Claims Of Instructing Gas Suppliers To Halt Supply To GENCOs

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) denies allegations of directing wholesale gas suppliers to stop gas supply to power-generating companies (GENCOs) over unpaid debts.

The clarification follows a statement from the Nigeria National Grid, which warns of an impending power outage due to an alleged directive from NMDPRA to halt gas supplies to GENCOs with outstanding payments. The statement attributes the situation to over N2 trillion in debts owed by the federal government and GENCOs to gas producers, reportedly affecting operations.

In an official response, NMDPRA dismisses the claims as unfounded. The Authority explains that no such directive is issued during its recent stakeholders’ engagement in Lagos, which focuses on wholesale gas supply licensing under the Petroleum Industry Act (PIA) 2021.

“The circulating report is completely false,” the Authority states. It adds that the discussions at the engagement or in any of its communications do not include halting gas supplies. NMDPRA reassures stakeholders and the public of its commitment to ensuring the continuous and uninterrupted supply of natural gas to GENCOs.

The Authority further guarantees that the distribution of natural gas and other petroleum products remains stable as the nation enters the festive season and transitions into 2025.

Nigeria’s power sector continues to grapple with liquidity challenges and underinvestment.

In June 2024, GENCOs urge the federal government to address over N2 trillion in unpaid electricity debts, warning of the impact on sustainable power generation.

By August, the government settles N205 billion of the N1.3 trillion owed to GENCOs, as part of efforts to improve liquidity. Earlier in May, the government allocates N130 billion to offset gas supply debts in the Nigerian Electricity Supply Industry (NESI). These measures aim to stabilize power generation and improve reliability in the sector.