The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has announced plans to end domestic gas price regulation by September 2028. This move is part of the Federal Government's efforts to strengthen the domestic gas industry, attract investment, and advance Nigeria's ambition of becoming a gas-powered economy by 2030. The proposed transition, expected to be completed within 24 months, will pave the way for a competitive market where prices are determined through commercial agreements between willing buyers and sellers.
NMDPRA's Chief Executive Officer, Rabiu Umar, disclosed this during a gas market maturity workshop organised under the Decade of Gas initiative at the Petroleum Technology Development Fund in Abuja. Umar stated that the authority had established a definite timeline for achieving a fully liberalised domestic gas market, marking a significant step towards implementing the market-oriented provisions of the Petroleum Industry Act. The transition will progressively reduce regulatory intervention in gas pricing while encouraging commercial negotiations, competition, and investment across the domestic gas value chain.
The proposed framework aims to strike a balance between creating a commercially attractive environment for investors and ensuring that natural gas remains accessible and affordable to domestic consumers. Umar stressed that "gas must be affordable for Nigerians while supporting President Ahmed Tinubu's investment reforms". He noted that the September 2028 target is in line with the Nigeria Decade of Gas goal to become a gas-powered economy by 2030. The NMDPRA chief explained that the transition would not be implemented indiscriminately but would depend on the readiness of individual market segments and their ability to meet clearly defined commercial and operational requirements.
Umar described the decision to establish a specific transition timeline as an important milestone in the development of Nigeria's domestic gas industry. He explained that the Petroleum Industry Act provides the legal foundation for gradually replacing the existing regulated pricing structure with a competitive market driven primarily by commercial contracts. Section 167 of the Act provides for the progressive development of the domestic gas market to a stage where stronger competition and commercial contracting would permit reduced regulatory intervention in pricing.
However, achieving this objective will require more than announcing a transition date, as the authority must first establish measurable indicators for determining when different segments of the market are sufficiently developed to operate competitively. These indicators will include the availability and diversity of gas supply, the number and capacity of market participants, access to transportation infrastructure, and the reliability of payment arrangements. Other considerations will include compliance with gas delivery obligations, access to credible market information, and the emergence of transparent price signals capable of supporting commercial negotiations.
Umar identified inadequate domestic gas supply as a major challenge that must be addressed before the country can establish a fully competitive market. Despite Nigeria's substantial natural gas resources, supply constraints continue to affect the domestic market, making it necessary to accelerate gas production and ensure that investments in transportation infrastructure are supported by adequate supply. He particularly highlighted the importance of securing sufficient gas volumes for major infrastructure projects, including the Ajaokuta-Kaduna-Kano pipeline, to ensure their commercial viability and contribution to domestic gas utilisation.
The NMDPRA is nearing the completion of its gas distribution licensing process, with the exercise expected to be concluded in the coming weeks. Qualified companies will receive gas distribution licences in the fourth quarter of 2026, representing another step towards strengthening the country's domestic gas distribution framework. The proposed transition follows earlier adjustments to regulated domestic gas prices, including the increase in the price of natural gas supplied to power generation companies to $2.18 per million British thermal units in March.
Key points
- The Nigerian Midstream and Downstream Petroleum Regulatory Authority aims to end domestic gas price regulation by September 2028.
- The transition will progressively reduce regulatory intervention in gas pricing while encouraging commercial negotiations, competition, and investment.
- The authority will establish measurable indicators to determine when different segments of the market are sufficiently developed to operate competitively.
