Nigeria Targets Liberalised Domestic Gas Market by 2028

By Adedapo Adesanya

Nigeria plans to end regulated pricing in the domestic gas market by 2028, as the country moves towards a fully liberalised willing-buyer, willing-seller framework.

The chief executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr 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 be guided by measurable indicators showing that different segments of the gas market had attained the required level of maturity under the Petroleum Industry Act (PIA).

He said the regulator was targeting a 24-month period to establish the conditions needed for the domestic gas market to operate fully on commercial terms.

“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.”

According to him, the transition would not be based on broad policy statements but on defined indicators, thresholds and safeguards.

He identified adequate and diversified supply, the number and quality of buyers and sellers, access to transportation infrastructure, contract strength, payment reliability, delivery obligations, market information and credible price signals as key indicators of market maturity.

Mr Umar, however, said domestic gas supply remained tight despite Nigeria’s abundant gas reserves, warning that infrastructure development must be matched by adequate gas volumes.

“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.

The NMDPRA boss specifically stressed the need to ensure that major projects, including the Ajaokuta-Kaduna-Kano gas pipeline, have sufficient gas supplies to make them commercially viable.

He said the regulator’s role would also evolve as the market matures, with greater focus on establishing market rules, ensuring fair access, protecting competition and monitoring market conduct.

Mr Umar disclosed that the authority had commenced consultations on draft regulations targeting anti-competitive practices, aimed at translating the competition provisions of the PIA into enforceable rules.

He added that gas market segments would not necessarily be liberalised simultaneously, as the regulator would determine which segments were ready to move first based on specific thresholds and safeguards.

The NMDPRA chief executive also said the authority was nearing the 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 government was also working to increase domestic utilisation of liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG), alongside several LNG and gas-to-power projects under development.

According to him, greater domestic gas utilisation could support electricity generation, reduce dependence on imports and minimise transmission losses associated with transporting power over long distances.

Mr Umar said creating a predictable and transparent regulatory environment remained critical to attracting long-term investment into the gas sector.

“For you to take an FID in a gas investment, you need to have a long-term contract,” he said, adding that the regulator was willing to engage with individual projects to address regulatory issues that could support investment.