National Economic Council Endorses Tinubu ‘s Royalty Deductions Plan To Offset N185bn Gas Debt

The National Economic Council (NEC) has endorsed President Bola Tinubu’s approval for the settlement of N185 billion outstanding obligations owed to gas producers, adopting a royalty-deduction arrangement to clear the long-standing debts and boost domestic gas supply.

At its 154th meeting held virtually on Wednesday and chaired by Vice President, Kashim Shettima, NEC received a briefing from the minister of Petroleum (Gas), Ekperikpe Ekpo, on the cost and availability of domestic gas, including the financial liabilities accumulated from gas supplied to the power sector over the years.

According to the minister, gas producers have cumulative debt claims of about $1 billion for gas supplied to the power sector dating back to 2011. Out of this, N185 billion—representing 78 per cent of the total naira-denominated claims—has been validated through submissions from NNPC Gas Marketing Ltd (NGML) and the Nigerian Electricity Regulatory Commission (NERC).

The variance involves additional claims by NEPL against its GenCo customers, as well as unreported claims by Shell, Seplat Energy, and NUIMS against NGML.
Council was informed that President Tinubu, on April 4, 2024, had approved the urgent settlement of the validated N185 billion through future oil and gas royalty deductions.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has since engaged with the six gas producers involved and agreed on a royalty deduction schedule to effect the payment.

Following the presentation, NEC commended the initiative, noting that clearing the debt was vital to supporting increased gas production and ensuring adequate supply for domestic use.

Council then approved the committee’s recommendations, including its concurrence with the President’s directive for the payment of the N185 billion to gas producers to stabilise and improve domestic gas delivery.