Impact of Domestic Natural Gas Utilization on the Power Sector in Nigeria

This study investigates the impact of domestic natural gas utilization on Nigeria's power sector performance from 2000 to 2022 using the Autoregressive Distributed Lag (ARDL) model. Natural gas supply and electricity generation served as proxies for natural gas utilization and power sector performance, with Gross Domestic Product (GDP), unemployment rate (UEMP), and inflation (INF) as control variables. The findings reveal that natural gas supply positively and significantly influences electricity generation in the short and long term, with a unit increase in gas supply resulting in a 0.0226-unit rise in electricity generation in the short run and a 0.01447-unit increase in the long run. The Error Correction Term (ECT) demonstrates a strong speed of adjustment to long-run equilibrium. Model fitness and diagnostic tests confirm the reliability of the results, explaining 99.42% of the variation in electricity generation and affirming its predictive robustness. The study aligns with the United Nations Sustainable Development Goal (SDG) 7 by emphasizing natural gas's role in providing affordable, reliable, and sustainable energy. It also contributes to SDG 8 (economic growth) and SDG 13 (climate action) by reducing energy poverty, fostering industrial development, and encouraging a transition to cleaner energy sources. The results underscore the strategic importance of natural gas in addressing Nigeria's energy challenges and achieving energy security. To ensure sustainable development, the study recommends further investments in natural gas infrastructure, renewable energy integration, price stabilization, and policy reforms to address supply constraints. These measures are essential for improving Nigeria’s energy reliability, driving socioeconomic progress, and meeting global sustainable development objectives.