Nigeria is set to end regulated pricing in the domestic gas market by September 24, 2028, as the Nigerian Midstream and Downstream Petroleum Regulatory Authority targets a transition to a fully functioning willing-buyer, willing-seller framework.
The Chief Executive of NMDPRA, Rabiu Umar, disclosed this on Thursday at the Gas Market Maturity Workshop organised under the Decade of Gas initiative at the Petroleum Technology Development Fund in Abuja.
Umar said the transition would depend on measurable conditions demonstrating the maturity of different segments of the gas market, in line with the provisions of the Petroleum Industry Act.
“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 envisaged a shift from a market largely coordinated through regulation to one increasingly driven by commercial contracts between willing buyers and willing sellers.
“Invariably, this is the first time that we have been bold enough to set a clear target for our gas market transition,” he said.
According to Umar, the authority is targeting a 24-month period to establish the conditions required to declare the market a fully functioning willing-buyer, willing-seller market.
“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.
NMDPRA lists conditions for gas market maturity
Umar stressed that the transition would 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.
However, the NMDPRA boss said domestic gas supply remained tight despite Nigeria’s vast gas resources.
He stressed that infrastructure development must be matched by sufficient gas supply to ensure that the infrastructure could be fully utilised.
“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.
“The focus right now is not just delivering the infrastructure, but ensuring that we have enough molecules to fill the pipeline,” he added.
Umar specifically stressed the need to ensure that major gas infrastructure projects, including the Ajaokuta-Kaduna-Kano pipeline, had sufficient gas supply to make them commercially viable.
He said the regulator’s role would also evolve as the market developed, with greater emphasis on establishing market rules, ensuring fair access, protecting competition and monitoring market conduct.
The NMDPRA chief executive disclosed that the authority had begun consultations on draft regulations on anti-competitive practices aimed at translating the competition provisions of the PIA into enforceable regulatory rules.
Gas distribution licences expected in Q4
Umar also called for a realistic assessment of the different segments of Nigeria’s gas market, noting that they were at different stages of development.
He said the transition would have to be properly sequenced by determining which market segments were ready to move first, the thresholds they must meet and the safeguards required before liberalisation.
The NMDPRA boss further disclosed that the authority was nearing the conclusion of the process for issuing gas distribution licences, with the exercise expected to be completed in the coming weeks.
He said qualified companies would receive the licences in the fourth quarter of 2026.
Umar also said the authority was working to deepen domestic utilisation of liquefied petroleum gas and liquefied natural gas, stressing that increased use of Nigeria’s gas resources would be an important indicator of economic growth.
He said the Nigerian Government was also seeking to expand the use of compressed natural gas, while several LNG and gas-to-power projects were being developed across the country.
According to him, greater domestic gas utilisation could support power generation, reduce dependence on imports and minimise transmission losses associated with moving electricity over long distances.
He added that the authority was committed to creating a predictable, coherent and transparent regulatory environment capable of attracting long-term investment into the gas sector.
Umar said gas projects required substantial upfront investment and long-term contracts before investors and financiers could commit capital.
“For you to take an FID 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.
Decade of Gas targets higher supply
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 horizon of the Decade of Gas programme in 2030.
Ubong said the programme had identified clear markers for achieving the target, including increasing gas supply to 12.6 billion cubic feet per day by 2030.
He said 16 key infrastructure projects were expected to support the growth of the gas market, while more than 60 projects capable of creating about 15 billion cubic feet per day of gas demand had been identified on the demand side.
He added that a mature gas market would require the development of a successful 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 must be driven by clearly defined milestones.
Taiwo said the association had consistently advocated a commercially driven gas market but stressed that the transition must be properly sequenced to avoid moving either prematurely or too slowly.
“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,” she said.
According to Taiwo, Nigeria had made significant progress in the gas industry over the past decade, but substantial work remained.
She called for stronger collaboration between the government, regulators and industry, with the government providing clear policy direction, regulators establishing predictable rules, and industry continuing to invest, innovate and execute projects.
Taiwo said the ultimate objective should be a gas market capable of attracting investment, encouraging greater participation and delivering reliable gas to industries, businesses and consumers.