The Federal Government plans to end regulated pricing in Nigeria’s domestic gas market by 24 September 2028, as it moves towards a fully commercial 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 organised under the Decade of Gas initiative in Abuja.
Mr Umar said the transition would depend on measurable indicators showing that different segments of the gas market had attained sufficient maturity to operate under commercial arrangements, in line with the Petroleum Industry Act.
Mr Umar said the NMDPRA was targeting a 24-month period to establish the conditions necessary for the market to become fully driven by willing buyers and willing sellers.
“Gas must be affordable for Nigerians while supporting President Ahmed Tinubu’s investment reforms. This transition is in line with the Nigeria decade of gas goal to become a gas-powered economy by 2030,” he said.
He explained that the PIA provided for a gradual shift from a market largely coordinated through regulation to one increasingly driven by commercial contracts between buyers and sellers.
“This is the first time that we have been bold enough to set a clear target for our gas market transition,” Mr Umar added.
Conditions for deregulation
The NMDPRA boss said the transition would not be based simply on a government declaration, but on specific indicators, thresholds and safeguards.
Among the conditions are adequate and diverse gas supplies, a sufficient number of credible buyers and sellers, access to transportation infrastructure, strong contractual arrangements, reliable payment systems, delivery obligations, market information and credible price signals.
Mr Umar said the sequencing would also be important because different segments of Nigeria’s gas market were at different stages of development.
Domestic Gas supply remains tight
Despite Nigeria’s substantial gas reserves, Mr Umar said domestic supply remained tight.
“If you look at supply, for example, on the domestic side, it is still tight, no matter how you look at it. We have a lot of work to do in our infrastructure space,” he said.
He stressed that infrastructure development must be matched by sufficient gas volumes.
“The focus right now is not just delivering the infrastructure, but ensuring that we have enough molecules to fill the pipeline,” he added.
Mr Umar specifically cited the Ajaokuta-Kaduna-Kano pipeline, saying adequate gas supply would be necessary for the project to achieve its commercial purpose.
NMDPRA plans competition rules
The regulator is also working on measures to prevent anti-competitive practices as the gas market becomes more commercially driven.
Mr Umar disclosed that the NMDPRA had begun consultations on draft regulations covering anti-competitive practices, with the aim of turning the competition provisions of the Petroleum Industry Act into enforceable rules.
He said the regulator’s role would increasingly focus on establishing market rules, ensuring fair access, protecting competition and monitoring market conduct.
Gas distribution licences
Mr Umar also disclosed that the NMDPRA was nearing the completion of its process for issuing gas distribution licences.
According to him, qualified companies are expected to receive the licences in the fourth quarter of 2026.
The authority is also working to increase domestic utilisation of liquefied petroleum gas, liquefied natural gas and compressed natural gas, while several LNG and gas-to-power projects are being developed.
Greater domestic gas utilisation, Mr Umar said, could support electricity generation, reduce dependence on imports and limit transmission losses associated with transporting electricity over long distances.
Decade of Gas targets
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 programme’s first horizon in 2030.
Mr Ubong said the programme had identified a number of milestones, including increasing Nigeria’s gas supply to 12.6 billion cubic feet per day by 2030.
He said 16 major infrastructure projects were expected to support the expansion of the gas market, while more than 60 demand-side projects capable of generating about 15 billion cubic feet per day of gas demand had been identified.
Gas industry seeks clear milestones
The President of the Nigerian Gas Association, Engr. Mrs Yetunde Taiwo, supported the move towards a commercially driven gas market but called for clearly defined milestones.
“As NGA, what we would like to see really is to see those goalposts, those milestones that have been set, that makes it a realistic journey for us to say we have achieved a willing buyer, willing seller status,” Mrs Taiwo said.
She said Nigeria had made significant progress in the gas industry over the past decade but still had substantial work to do.
Mrs Taiwo called for stronger collaboration between government, regulators and industry, with the government providing clear policy direction, regulators establishing predictable rules and industry continuing to invest and develop projects.
The planned end to regulated gas pricing represents a shift towards greater market-based determination of gas prices and commercial contracts.
However, the transition is tied to the development of adequate supply, infrastructure, competition, reliable payment systems and other safeguards. The NMDPRA has therefore indicated that market maturity indicators will be central to the process rather than the deadline operating in isolation.
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