BUSINESS DAY
Nigeria is proposing for gas producers to sell gas to local power plants in naira to solve problems of dollar shortages after a second currency devaluation in less than a year is expected to balloon costs and make it hard for firms to pay.
The devaluation of the naira has led to the emergence of a government subsidy as high as N160bn a month but it is unclear for how long the government will continue to cover such massive bill.
Nigeria has 24 gas power plants with a combined output capacity of 11,434 megawatts, but it only delivers around a third of its capacity to the grid due to issues with gas supply.
“Proposing domestic gas payment in naira is a key step toward stability, aligning with our economy’s needs and promoting sustainable energy production,” Power Minister Adebayo Adelabu said in a post on X.
Adelabu added that he plans to create legislative measures that will mandate naira payments for domestic gas supply.
Natural gas is sold in dollars to power plants because investments tied to building gas plants and pipelines are priced and paid for in dollars.
