LAGOS, Aug 4 – Nigeria plans to phase out regulated domestic natural gas pricing and transition to a market-driven system within the next one to two years, according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The announcement marks the first time the regulator has provided a timeline for moving away from government-administered pricing in parts of Nigeria’s domestic gas market, signalling progress towards broader reforms under the Petroleum Industry Act (PIA).
Speaking at the Nigeria Annual International Conference and Exhibition, Rabiu Umar, Chief Executive of the NMDPRA, said the regulator is overseeing a gradual shift to a “willing buyer, willing seller” pricing framework as competition in the domestic gas market continues to strengthen.
According to Umar, “The regulator is guiding an orderly transition” towards a willing buyer, willing seller model for natural gas pricing in line with the provisions of the Petroleum Industry Act.
The PIA empowers the regulator to set domestic gas prices for designated strategic sectors, including electricity generation and selected gas-based industries, while providing a pathway for a gradual transition to a more competitive and liberalised market.
Gas producers have long advocated for faster price liberalisation, arguing that market-based pricing would encourage greater investment in gas production and infrastructure. However, successive governments have maintained that the domestic market has not yet reached the level of maturity required for full deregulation.
Limited pipeline infrastructure, transportation bottlenecks and restricted market access have continued to constrain competition, making regulatory oversight necessary to ensure reliable gas supply to priority sectors.
Umar said the pricing framework will evolve as pipeline networks expand and more buyers and sellers gain access to the market.
Under the proposed system, natural gas prices will increasingly be negotiated through commercial agreements rather than being determined by regulatory mechanisms, reflecting broader efforts to develop a more efficient and competitive domestic gas market.
The planned transition forms part of Nigeria’s strategy to unlock investment across the gas value chain, improve market efficiency and maximise the country’s vast natural gas resources, while supporting industrial development and long-term energy security.
