Nigeria is targeting the transition to a fully deregulated domestic gas market by September 2028, with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) moving to establish measurable conditions for a willing-buyer, willing-seller framework.
The NMDPRA Chief Executive, Mallam Rabiu Umar, disclosed this at the Decade of Gas Market Maturity Workshop, where he said the transition would be anchored on the maturity of different segments of the domestic gas market.
According to a statement released by the Authority, Umar said the regulator had commenced work on defining clear and measurable indicators for the transition from regulated pricing to greater commercial contracting, in line with the Petroleum Industry Act (PIA).
He identified gas supply, market participation, infrastructure access, contract performance, payment discipline, reliable market data and credible price signals as key indicators that would determine the readiness of market segments for liberalisation.
“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.
According to him, the plan is to end regulated pricing by September 24, 2028, subject to the emergence of a sufficiently mature market capable of supporting commercial transactions.
“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,” Umar emphasised.
The NMDPRA boss, however, acknowledged that the domestic gas market still faces significant constraints, particularly inadequate supply, limited infrastructure access, payment risks and weak contract performance.
He said Nigeria’s abundant gas reserves had not translated into sufficient domestic supply, stressing that infrastructure expansion must be matched by adequate gas molecules to make new projects commercially viable.
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“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 cited the Ajaokuta-Kaduna-Kano (AKK) pipeline, stressing the need to ensure that major gas infrastructure projects have adequate supply to operate effectively and generate commercial value.
He said market liberalisation would therefore be sequenced, with different segments assessed individually to determine which were ready to move first, the thresholds they must meet and the safeguards required before deregulation.
The regulator’s role, he added, would also evolve as the market matures, shifting increasingly towards establishing market rules, ensuring fair access, protecting competition and monitoring market conduct.
Umar disclosed that the NMDPRA had commenced consultations on draft regulations aimed at tackling anti-competitive practices and translating the competition provisions of the PIA into enforceable rules.
He stressed that producers, buyers, infrastructure operators, financial institutions, government agencies and regulators would need to work together to create a functional commercial gas market.
The objective, he said, was to create a market in which investment responds confidently to demand, infrastructure facilitates efficient transactions, contracts command greater credibility and regulatory intervention reduces as the market develops.
The NMDPRA chief executive also stated that the authority was nearing completion of the process for issuing gas distribution licences, with qualified companies expected to receive the licences in the fourth quarter of 2026.
He said the regulator was also working to deepen domestic utilisation of liquefied petroleum gas (LPG) and liquefied natural gas (LNG), while the government was seeking to expand compressed natural gas (CNG) use.
According to him, several LNG and gas-to-power projects are also under development, with increased domestic gas utilisation capable of supporting electricity generation, reducing import dependence and limiting transmission losses associated with transporting power over long distances.
Umar said a predictable, coherent and transparent regulatory environment was essential to attracting long-term capital into the gas industry.
He noted that gas projects typically require substantial upfront investment and long-term contracts before investors and financiers would commit funds.
“For you to take an FID in a gas investment, you need to have a long-term contract,” he said, adding that the NMDPRA was willing to engage with individual projects to identify regulatory measures that could facilitate their development.
Pinnacle Daily reports that despite the deregulation of the downstream petroleum market (petrol, diesel, kerosene and aviation fuel), domestic gas pricing in Nigeria has remained regulated. NMDPRA has continued to fix domestic gas price caps.
It would be recalled that in early April, the downstream regulator announced an adjustment of the Domestic Base Price (DBP) for natural gas to $2.18 per million British thermal units (MMBtu), up from the 2025 rate of $2.13/MMBtu.
The adjustment, which took effect on April 1, 2026, represents a 2.35 per cent increase. While the $2.18/MMBtu base price was for the Power Sector, the base price for commercial users was fixed at $2.68/MMBtu, up from $2.63, and Gas-Based Industries has a price band with a floor of $0.90 and a ceiling of $2.18/MMBtu.
It said then that the review was in line with the PIA 2021 and the current market conditions, aimed at ensuring a “market-based pricing regime” that encourages upstream producers to supply gas to the domestic market voluntarily rather than prioritizing exports.
Analysts noted that the planned transition is expected to test the ability of Nigeria’s gas market to move from regulatory price intervention towards commercially negotiated transactions, while balancing investment requirements with affordability and reliable domestic supply.
Victor Ezeja is a Nigerian journalist skilled in producing insightful news analyses, feature stories, and interviews that simplify complex issues and drive informed public discourse. His work combines rigorous research, balanced reporting, and compelling storytelling to highlight developments shaping industries and society. Victor, who holds a Master's Degree in Mass Communication, specializes in energy, aviation, business, and economic reporting. He can be reached via @VICTOREZEJA on X