Nigeria may face a deeper electricity shortage in the coming weeks after gas suppliers halted fuel supply to several thermal power plants over an estimated ₦3.3 trillion debt owed by power generation companies. Industry operators warn that the development could trigger widespread blackouts across the country.

The warning was issued by Dr Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies, who explained that gas suppliers have informed power generation companies that they will no longer provide gas unless outstanding payments are settled. Thermal plants depend heavily on gas to generate electricity and account for a large portion of Nigeria’s power supply.

Ogaji revealed that the debt crisis within Nigeria’s electricity sector has been building for years. According to her the Nigerian Bulk Electricity Trading company which buys electricity from generation companies has failed to fully pay for power supplied since the sector was privatized in 2013. As a result liabilities across the industry have ballooned to about ₦6.8 trillion with a significant portion linked to gas supplied to thermal plants.

She explained that about seventy percent of the electricity produced on the national grid comes from gas fired plants. Because of this structure a large share of the sector’s debt belongs to gas suppliers who provide the fuel required for electricity generation. Industry estimates suggest that roughly ₦3.3 trillion of the outstanding debt is owed directly to gas producers and transporters.

Electricity distribution companies have already warned customers about reduced power supply in some areas due to the declining availability of gas for power plants. The Transmission Company of Nigeria has also been forced to ration available electricity across the grid as generation drops in several plants.

Experts say the growing debt crisis threatens the stability of Nigeria’s electricity industry which has long struggled with poor infrastructure financing gaps and low revenue collection. Without urgent intervention to clear the debts or restructure the sector analysts warn that the country could experience more frequent blackouts in the weeks ahead.