FG TO END REGULATED GAS PRICING IN 2028

The Federal Government is set to end regulated pricing in Nigeria’s domestic gas market by September 24, 2028, as part of plans to transition to a fully established willing-buyer, willing-seller framework.

The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Rabiu Umar, disclosed this on Thursday at the Gas Market Maturity Workshop held under the Decade of Gas initiative at the Petroleum Technology Development Fund in Abuja.

Umar said the transition would depend on measurable conditions showing that different segments of the gas market had reached the required level of maturity, in line with the Petroleum Industry Act.

He said the goal was to make gas affordable for Nigerians while supporting the Federal Government’s investment reforms and the objective of making Nigeria a gas-powered economy by 2030.

According to him, the PIA provides for a gradual shift from a market largely coordinated through regulation to one increasingly driven by commercial agreements between willing buyers and sellers.

Umar said the NMDPRA was targeting a 24-month period to establish the conditions needed to declare the market fully functional under the willing-buyer, willing-seller model.

He stressed that the transition would not be based on general declarations but on clearly defined indicators, thresholds and safeguards.

The NMDPRA chief identified supply availability and diversity, the number and quality of buyers and sellers, access to transportation infrastructure, contract strength, payment reliability, delivery obligations, market information and credible price signals as indicators of market maturity.

He, however, noted that domestic gas supply remained tight despite Nigeria’s large gas reserves, adding that infrastructure development must be accompanied by adequate gas supply to utilise the facilities.

Umar said the government had substantial work to do to increase domestic gas supply and ensure that major infrastructure projects had enough gas to operate effectively.

He specifically mentioned the Ajaokuta-Kaduna-Kano pipeline, stressing that sufficient gas supply would be required for such projects to become commercially useful.

He said the role of the regulator would also change as the market matured, with greater emphasis on setting market rules, ensuring fair access, protecting competition and monitoring market conduct.

Umar disclosed that the NMDPRA had started consultations on draft regulations addressing anti-competitive practices. The proposed rules are intended to give effect to the competition provisions of the PIA.

He also said different segments of the Nigerian gas market were at different stages of development, meaning the transition to liberalised pricing would have to be properly sequenced.

According to him, the authority would determine which market segments were ready to move first, the thresholds they must meet and the safeguards required before liberalisation.

Umar further disclosed that the NMDPRA was nearing the completion of the process for issuing gas distribution licences, with qualified companies expected to receive licences in the fourth quarter of 2026.

He said the authority was also working to increase domestic utilisation of liquefied petroleum gas and liquefied natural gas, describing greater use of the country’s gas resources as an important indicator of economic growth.

The NMDPRA chief added that the government was seeking to expand compressed natural gas use, while several LNG and gas-to-power projects were being developed across the country.

He said increased domestic gas utilisation could support power generation, reduce dependence on imports and minimise transmission losses associated with transporting electricity over long distances.

Umar said the regulator was committed to creating a predictable and transparent environment capable of attracting long-term investment into the gas sector.

He noted that gas projects required substantial upfront investment and long-term contracts before investors and financiers could commit funds, adding that the authority was willing to work with individual projects to address regulatory issues that could support their development.

Also speaking, the Coordinating Director of the Decade of Gas Secretariat, Ed Ubong, said Nigeria could achieve a willing-buyer, willing-seller gas market before the end of the first phase of the Decade of Gas programme in 2030.

Ubong said the programme had identified key targets, including increasing gas supply to 12.6 billion cubic feet per day by 2030.

He added that 16 major infrastructure projects had been identified to support the growth of the gas market, while more than 60 projects capable of generating about 15 billion cubic feet per day of gas demand had also been identified.

Ubong said a mature gas market would require the development of a functional gas-to-power market and greater access to cooking gas.

The President of the Nigerian Gas Association, Yetunde Taiwo, said the transition to a willing-buyer, willing-seller market should be based on clearly defined milestones.

Taiwo said the association had consistently supported a commercially driven gas market but stressed that the transition needed to be properly sequenced to avoid moving either too quickly or too slowly.

She called for stronger collaboration among the government, regulators and industry, with the government providing clear policy direction, regulators establishing predictable rules and industry players continuing to invest and execute projects.

Taiwo said the broader objective should be to develop a gas market capable of attracting investment, increasing participation and delivering reliable gas to industries, businesses and consumers.