Power minister wants payments for gas in naira

The Minister of Power, Bayo Adelabu, says he is working towards ensuring that electricity generation companies, also known as GenCos, can pay for domestic gas supply in naira. 

Adelabu said on social media platform X on Friday that he met with the Minister of State for Petroleum Resources (Gas), Ekprerikpe Ekpo, to address the ongoing challenge of insufficient gas supply to GenCos. 

“Nigeria has significant gas reserves, but delivering enough gas to meet domestic demand has been a persistent issue. To tackle this, we’ve established a joint ministerial committee,” he said.

He pointed out the importance of finding innovative solutions for ensuring stable gas supply to the power sector.

“Proposing domestic gas payment in naira is a key step toward stability, aligning with our economy’s needs and promoting sustainable energy production,” Adelabu said.

Payment shortfalls within the electricity sector pose risks to production and the entire value chain, according to him.

“Leveraging my financial sector experience and contacts, I’m working with stakeholders to advocate for legislative measures mandating naira-denominated payments for domestic gas supply,” he said.

The minister said addressing gas pipeline vandalism in the Niger Delta is also a priority.

He said A 2021 NEITI report highlighted 7,143 cases of pipeline breakages and deliberate vandalism between 2017 and 2021, significantly impacting the efficiency of the electricity supply industry.

“Clear contractual arrangements between GenCos and gas suppliers are essential to ensure consistent supply and maximize our power generation capabilities,” Adelabu said. “The upcoming commissioning of the OB3 line is expected to greatly enhance gas supply to the northern region, fostering industrial growth.”

He said the establishment of a joint ministerial committee to tackle the issue of inadequate gas supply to GenCos “represents a crucial stride” towards resolving challenges in Nigeria’s energy sector. 

“We are dedicated to assembling a team of experts for this committee, and upon its formation, we will publicly announce the timelines for our initiatives,” he added.

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