Nigeria Targets Market-Based Gas Pricing in Two Years

Nigeria plans to replace regulated domestic natural gas pricing with a market-based system within the next one to two years as the government works to expand infrastructure and encourage greater competition in the sector.

Speaking at the Nigeria Annual International Conference and Exhibition, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Rabiu Umar, said the transition would be implemented gradually in line with the Petroleum Industry Act. He said the objective is to establish a “willing buyer, willing seller” framework in which gas prices are determined by market forces rather than government regulation.

Gas producers have long advocated faster price liberalisation, arguing that regulated prices discourage investment in the sector. However, the government has maintained that full deregulation requires a more competitive domestic gas market supported by adequate infrastructure.

Umar said those conditions are steadily improving through the expansion of pipeline networks and other gas infrastructure, which will increase access for buyers and sellers while reducing transport bottlenecks. He added that as competition grows, commercial negotiations will increasingly determine gas prices.

Under the Petroleum Industry Act, the regulator currently sets gas prices for strategic sectors, including electricity generation and selected gas-based industries. Umar said the long-term goal is to create a competitive domestic gas market that attracts investment, improves efficiency and ensures a reliable supply of natural gas to support Nigeria’s industrial and economic development.

SOURCE: Reuters