FG allows gas producers to offset unpaid debts from royalty payments, aiming to boost domestic gas supply and power generation in Nigeria
The Federal Government has approved a framework allowing upstream gas producers to offset outstanding debts against royalty payments, a move designed to improve gas supply and support Nigeria’s electricity generation.
The announcement was made during the ongoing 9th Nigerian International Energy Summit in Abuja by Mr. Ed Ubong, Decade of Gas Coordinator.
He said President Bola Ahmed Tinubu approved the measure to ensure gas producers continue operations without financial strain while the government settles owed payments.
“It really doesn’t make sense for a gas producer to continue to give government royalties when the government is doing that. So there’s been a conversation there, finally approved by the governors and the president,” Ubong said.
He added that the Nigerian National Petroleum Company Limited (NNPCL), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and gas producers have agreed on a practical method for the offset.
The policy comes amid longstanding challenges in Nigeria’s power sector.
Engr. Saidu Mohammed, Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), lamented that electricity generation has increased only marginally from 4,500MW to 5,000MW in two decades, despite available generating capacity of 13,000MW.
Mohammed described gas as not just an energy commodity but an economic enabler essential for sustainable power supply. He called for transparent pricing and improved gas availability to unlock Nigeria’s energy potential.
Under the Petroleum Industry Act (PIA), NMDPRA is empowered to determine gas pricing and enforce domestic supply obligations, while transitioning from a control-based to a performance-driven regulatory framework.
The royalty offset policy aims to prevent cash-flow bottlenecks for producers while simultaneously boosting domestic gas availability, which has remained constrained despite Nigeria’s over 200 trillion cubic feet of reserves.
Fresh concerns have emerged over compliance with a court order issued by the High Court of Kano State on April 8, 2026, restraining key parties—including the Honourable Minister of Education, the Kano State Ministry of Land and Physical Planning, the Kano State Urban Development Authority, and Pluck Global Company Limited—from further actions pending the determination of the matter before the court.
Findings indicate that while all parties—except the concessionaire, Pluck Global Company Limited—were duly served within two days of the order, significant challenges were encountered in effecting service on the company, raising troubling questions about its corporate traceability and regulatory vetting.
A review of the company’s records filed with the Corporate Affairs Commission (CAC) revealed addresses that could not be verified as functional business locations. Notably, documentation submitted to Federal Government College (FGC), Kano, dated June 20, 2024, listed two addresses: 8B, Lalupon Street, off Keffi Street, off Awolowo Road, Ikoyi, Lagos, as its head office, and 3 Bargery Road, Bompai, Kano, as its branch office.
However, a physical visit to the Ikoyi address revealed that the entire property is occupied by a company identified as Golden Alchemy, whose staff категорically denied any knowledge of, or shared occupancy with, Pluck Global Company Limited.
Efforts to trace the Kano address yielded even more unsettling findings. The location—a locked duplex—showed no visible signs of commercial activity. Neighbours, while reluctant to speak on record, alluded to irregular movements at odd hours, casting further doubt on the legitimacy of the premises as a corporate office.
In a twist, after multiple attempts to establish contact, an individual purportedly representing the company surfaced in Kano and agreed to receive and acknowledge the court order on April 11, 2026, at approximately 6:00 pm. Curiously, the Ikoyi address—already discredited—was again listed as the company’s official address in the acknowledgment.
These developments raise critical questions regarding due diligence and Know Your Customer (KYC) protocols on the part of the Federal Ministry of Education. They also cast a spotlight on the Infrastructure Concession Regulatory Commission (ICRC), should a concession agreement indeed have been executed with the company. Stakeholders say it would be instructive to review the addresses contained in all official correspondences and contractual documents linked to the transaction.
Meanwhile, a visit to the premises of Federal Government College, Kano, revealed ongoing construction activity, with workers observed excavating foundations. When approached, the workers declined to disclose the authority under which they were operating—despite the subsistence of a court order restraining further action.
Notably, a previously installed project billboard bearing the insignia of the school authorities and the Federal Ministry of Education had been removed. Sources within the institution suggest that the directive for its removal may have emanated from the Ministry following receipt of the court order.
The unfolding situation presents a complex mix of legal, regulatory, and accountability issues—raising the spectre of possible non-compliance with judicial directives, as well as deeper concerns about transparency in public-private concession arrangements.
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