Nigeria is targeting September 2028 to end price regulation in the domestic gas market as the country moves towards a fully established willing-buyer, willing-seller framework.
Rabiu Umar, chief executive officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), disclosed this on Thursday at a gas market maturity workshop organised under the Decade of Gas initiative at the Petroleum Technology Development Fund (PTDF) in Abuja.
Umar said the transition would take place within 24 months, subject to the market meeting defined maturity conditions.
“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,” Umar said.
He said the transition would seek to keep gas affordable for Nigerians while supporting President Bola Tinubu’s investment reforms.
According to Umar, moving to a willing-buyer, willing-seller framework by 2028 aligns with the Nigeria Decade of Gas objective of developing a gas-powered economy by 2030.
Gas market maturity indicators
Umar said the transition would be based on measurable conditions showing that different segments of the gas market had matured, in line with the Petroleum Industry Act (PIA).
“Invariably, this is [the] first time that we have been bold enough to set a clear target for our gas market transition,” he said.
He said the PIA envisages a gradual shift from a market largely coordinated through regulation to one increasingly driven by commercial contracts between willing buyers and sellers.
Umar added that Section 167 provides for the gradual movement of the domestic gas market towards a point where price regulation can step back as commercial contracting and competition strengthen.
The NMDPRA chief said the transition would not be based on broad statements of intent but on defined indicators, thresholds and safeguards.
He listed 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 key indicators.
NMDPRA warns on gas supply
Umar said Nigeria’s domestic gas supply remains tight despite the country’s vast gas reserves.
He stressed that infrastructure development must be matched by sufficient gas supplies to ensure the facilities are commercially useful.
He specifically highlighted the Ajaokuta-Kaduna-Kano (AKK) pipeline, saying there must be enough gas molecules to utilise the infrastructure.
“The focus right now is not just delivering the infrastructure, but ensuring that we have enough molecules to fill the pipeline,” Umar added.
He said the regulator’s role would also evolve as the market develops, with greater focus on establishing market rules, ensuring fair access, protecting competition and monitoring market conduct.
According to Umar, sequencing the transition would involve identifying market segments ready to move first, the thresholds they must meet and the safeguards required before liberalisation.
Gas distribution licences
Umar also said the NMDPRA was close to concluding the process for issuing gas distribution licences.
He said the exercise is expected to be completed in the coming weeks, with qualified companies scheduled to receive licences in the fourth quarter of 2026.
In March, the NMDPRA increased the price of natural gas supplied to power generation companies (GenCos) to $2.18 per metric million British thermal units (MMBtu).
The latest plan marks a proposed shift towards greater market-based pricing, subject to the gas market meeting the conditions set by the regulator.
