Federal Government Considers Tariff Reform to Sustain Gas-to-Power Projects

The Federal Government is considering new tariff strategies and financial interventions to support the viability of gas-to-power projects currently facing payment and pricing challenges.

This initiative followed a high-level meeting held at the NNPC Towers in Abuja, where the Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, and the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, met with the leadership of the Nigerian National Petroleum Company Limited (NNPC Ltd). The NNPC delegation was led by Dr. Salihu Jamari, who represented the Executive Vice President for Gas, Power, and New Energy.

Discussions at the meeting focused on the urgent need for financial and policy interventions to address tariff-related challenges affecting the Maiduguri Emergency Power Plant, the Okpai Independent Power Plant (IPP) Phase 2, and the Kano IPP Phase 1.

In a statement issued by Mr. Louis Ibah, spokesperson to the Minister of State for Petroleum Resources (Gas), NNPC Ltd. expressed concern about delayed payments and tariff shortfalls within the Nigeria Bulk Electricity Trading (NBET) framework. These issues, according to the company, pose a serious threat to the long-term sustainability of the power plants and could compromise electricity supply to key regions.

NNPC Ltd. warned that if no action is taken, continued operations at these facilities could be undermined, leading to disruptions in power supply with significant economic and social consequences.

Minister Ekpo emphasized that resolving the financial bottlenecks is essential to ensuring that Nigeria’s gas-to-power infrastructure delivers maximum value to the economy. He noted that steady power generation is vital for promoting regional development, especially in Maiduguri and Kano, as well as boosting supply to the national grid through the Okpai Phase 2 facility.

Minister Edun acknowledged the urgency of the situation and stressed the need for a cooperative approach among all stakeholders. He called for the establishment of a sustainable financial mechanism to ensure that these gas-powered plants continue to operate efficiently and contribute to national energy security and economic growth.

The participants at the meeting agreed to hold a follow-up session with the Minister of Power. This next step will focus on developing practical and time-bound solutions to support the continued operation of the affected power plants and to strengthen Nigeria’s gas-to-power strategy.