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 established 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, Abuja.
Umar said the transition would be based on measurable conditions that demonstrate 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 stated.
He said the PIA envisaged a shift from a market largely coordinated through regulation to one driven increasingly 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 noted.
According to Umar, the authority was 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 stressed that the transition must not be based on broad statements of intent but on clearly defined indicators, thresholds and safeguards.
Umar 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.
The NMDPRA boss, however, said Nigeria’s domestic gas supply remained tight despite the country’s vast gas resources, stressing that infrastructure development must be matched by sufficient gas molecules to utilise the infrastructure.
“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 useful.
He said the role of the regulator would also evolve as the market developed, with greater emphasis on establishing market rules, ensuring fair access, protecting competition and monitoring market conduct.
