Nigeria is moving towards a more market-driven domestic gas sector, with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announcing plans to end gas price regulation by September 2028.
The authority said the goal is to establish a fully functioning willing-buyer, willing-seller market, where prices are increasingly determined by commercial agreements between buyers and suppliers rather than direct regulatory controls.
NMDPRA Chief Executive Officer, Rabiu Umar, disclosed the plan on Thursday during a gas market maturity workshop held in Abuja under the Decade of Gas initiative.
Umar said the transition would be gradual and would depend on the gas market meeting specific conditions before regulation is scaled back.
“The journey we are starting should lead us to a place where we should target a 24-month, at best, period within which we will be able to declare the market to be truly a willing buyer, willing seller market,” he said.
He said the government’s objective was to develop a gas market that remains affordable for Nigerians while also creating conditions capable of attracting investment.
The NMDPRA boss said the planned transition is consistent with the Decade of Gas ambition of moving Nigeria towards a gas-powered economy by 2030.
He explained that the Petroleum Industry Act (PIA) provides a framework for gradually moving the domestic gas market away from extensive price regulation and towards commercial contracts and competition.
“Invariably, this is [the] first time that we have been bold enough to set a clear target for our gas market transition,” Umar said.
However, he stressed that Nigeria would not simply remove price controls without first determining whether the market was ready.
According to him, the regulator will assess factors including the availability and diversity of gas supplies, the number of buyers and sellers, access to transportation infrastructure, the reliability of payments, contract strength and delivery obligations.
The availability of reliable market information and credible price signals will also form part of the assessment.
Umar said Nigeria continues to face tight domestic gas supply despite its significant gas reserves. He warned that building infrastructure alone would not be enough if there is insufficient gas to operate the facilities.
He specifically pointed to major projects such as the Ajaokuta-Kaduna-Kano (AKK) pipeline, saying adequate gas supplies would be necessary for such infrastructure to deliver its intended commercial benefits.
“The focus right now is not just delivering the infrastructure, but ensuring that we have enough molecules to fill the pipeline,” he said.
As the market develops, Umar said the regulator’s responsibilities would also change. Rather than directly controlling prices, the authority would increasingly focus on setting market rules, ensuring fair access, protecting competition and monitoring the conduct of market participants.
He said the transition would therefore involve deciding which parts of the gas market are ready for liberalisation, the conditions they must satisfy and the safeguards that need to be put in place.
Meanwhile, NMDPRA is nearing the completion of its process for issuing gas distribution licences. Umar said qualified companies are expected to receive the licences in the fourth quarter of 2026.
The development comes months after the authority increased the domestic natural gas price for power generation companies to $2.18 per metric million British thermal units (MMBtu) in March.
Source: NMDPRA.
