Nigeria plans to end domestic gas price regulation by September 2028 as NMDPRA targets a fully established willing-buyer, willing-seller gas market.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) says Nigeria will stop regulating prices in the domestic gas market by September 24, 2028, targeting a transition to a fully established willing-buyer, willing-seller (WBWS) framework.
Rabiu Umar, chief executive officer of NMDPRA, disclosed the plan on Thursday at the Gas Market Maturity Workshop, organised under the Decade of Gas initiative at the Petroleum Technology Development Fund (PTDF) in Abuja.
The workshop was convened by NMDPRA, the Ministry of Petroleum Resources and the Decade of Gas Secretariat, and was designed to validate the gas market maturity framework, assess Nigeria’s current position, and agree priority actions, sequencing and responsibilities for the transition.
“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.
Balancing Affordability and Investment
The NMDPRA chief said gas must be affordable for Nigerians while supporting President Bola Tinubu’s investment reforms.
He said the transition to a fully established willing-buyer, willing-seller framework by 2028 is in line with Nigeria’s Decade of Gas goal to become a gas-powered economy by 2030.
The NMDPRA chief said the transition would be based on measurable conditions demonstrating the maturity of different segments of the gas market, in line with the provisions of 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.
Umar said the PIA envisages a shift from a market largely coordinated through regulation to one increasingly driven by commercial contracts between willing buyers and willing sellers. He said Section 167 of the Act provides for the gradual movement of the domestic gas market towards a point where price regulation can step back as commercial contracting and competition become stronger.
Market Maturity Indicators
The NMDPRA chief said the transition must not be based on broad statements of intent but on clearly defined indicators, thresholds and safeguards.
He identified supply availability and diversity, the number and quality of buyers and sellers, access to transportation infrastructure, strength of contracts, payment reliability, delivery obligations, market information and credible price signals as key indicators of market maturity.
Umar said Nigeria’s domestic gas supply remains tight despite the country’s vast gas resources, stressing that infrastructure development must be matched by sufficient gas molecules to utilise that infrastructure. He also stressed the need to ensure that major gas infrastructure projects, including the Ajaokuta-Kaduna-Kano (AKK) pipeline, have sufficient gas supply to make them commercially useful.
“The focus right now is not just delivering the infrastructure, but ensuring that we have enough molecules to fill the pipeline,” Umar said.
He added that gas projects require substantial upfront investment and long-term contracts before investors and financiers can commit capital.
“For you to take an FID [final investment decision] in a gas investment, you need to have a long-term contract,” he said, adding that the authority was willing to engage with individual projects to identify regulatory measures that could support their development.
The Wider Supply and Demand Picture
Speaking at the same event, Ed Ubong, Coordinating Director of the Decade of Gas Secretariat, expressed confidence that Nigeria could achieve a fully functioning willing-buyer, willing-seller market before 2030. He identified supply, infrastructure, demand, gas-to-power and LPG as critical to market maturity, citing a gas supply ambition of 12.6 billion cubic feet per day (Bcf/d) by 2030 and 16 key infrastructure projects, including the already-completed OB3 pipeline, the AKK pipeline, the Escravos-Odidi connection, and the connection of offshore Seplat fields to the Quantum Industrial Terminal (QIT) in Eket. On the demand side, Ubong said more than 60 projects, representing approximately 15 Bcf/d of potential demand by 2030, had been identified.
The NMDPRA chief said the role of the regulator would also evolve as the market develops, with greater emphasis on establishing market rules, ensuring fair access, protecting competition, and monitoring market conduct.
He said sequencing the transition would require determining which market segments were ready to move first, the thresholds they must meet, and the safeguards required before liberalisation.
Gas Distribution Licences
Umar further said the authority is close to concluding the process for issuing gas distribution licences, with the exercise expected to be completed in the coming weeks. He said qualified companies would be issued gas distribution licences in the fourth quarter (Q4) of 2026.
In March, the NMDPRA increased the price of natural gas for power generation companies (GenCos) to $2.18 per metric million British thermal units (MMBTU).
