ABUJA, Nigeria (VOICE OF NAIJA)- Chairman of Geometric Power and former Minister of Power, Barth Nnaji, has lamented Nigeria’s persistent failure to supply sufficient gas to its power plants despite holding over 200 trillion cubic feet of proven reserves.
Speaking at the Orienta News Nigeria 2025 Conference held recently in Lagos, Nnaji described the situation as a national contradiction, stressing that the country’s inability to translate its gas wealth into reliable electricity remains deeply troubling.
“It’s quite perplexing. We are a gas-rich country, yet we struggle to supply enough gas to our power plants. It’s a contradiction that many find hard to understand,” he said.
Nnaji highlighted recent adjustments in gas pricing for power generation, noting that while the Nigerian Midstream and Downstream Petroleum Regulatory Authority had revised the domestic gas price downward to $2.13/MMBtu effective April 1, 2025, generation companies often pay more than $2.70/MMBtu on the open market due to supply constraints and contractual terms.
“Because most electricity is generated using gas, and GenCos depend heavily on sourcing this gas from the open market, the disparity between the regulated and actual prices continues to strain the sector,” he said.
According to Nnaji, this pricing gap is exacerbating liquidity issues in the power sector, significantly contributing to the over N1 trillion electricity subsidy recorded in the first half of 2025, as well as mounting debts owed to GenCos by the Federal Government.
He warned that the current benchmark price for gas-to-power is unsustainable and fails to reflect market realities, placing immense pressure on electricity producers.
He also reiterated the need for tariffs that reflect actual industry costs, particularly since many of the sector’s inputs are imported and dollar-dependent.
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“The energy charge component of the power tariff must be able to cover the cost of maintaining the assets. If operators can’t recover expenses for operations and maintenance, which are often dollar-denominated, there will be recurring system failures.
The regulator must continue to adjust the tariff in line with actual industry costs to ensure sustainability,” he posited.
Nnaji also criticized Nigeria’s inadequate investment in gas production and transportation infrastructure, calling for greater private sector involvement in the energy value chain.
“Nigeria has all the capacity it needs. Government should remain an enabler, but the private sector must take the lead. If we don’t produce enough gas, even promising initiatives like CNG adoption will not take off,” he stated.
He observed that most gas-fired power plants suffer erratic operations due to fluctuating gas pressure and unreliable supply, which he described as unacceptable for a country with abundant reserves.
He maintained that adequate gas delivery could help stabilise the economy and drive industrialisation, including the development of petrochemicals and other gas-based industries.
Nnaji further stressed the importance of having enforceable Power Purchase Agreements (PPAs) and resolving persistent issues like pipeline vandalism and operational disruptions.
“Without a consistent gas supply and proper market design, we can’t expect PPAs to deliver,” he said.
On Nigeria’s long-term energy mix, Nnaji projected that gas-fired power will remain the dominant source for the next one to two decades, despite the growing role of renewable sources.
“Hydro power has its limits in Nigeria due to seasonal variability and geopolitical concerns, particularly as it depends on stable relationships with northern communities and neighbouring countries,” he said.