Image: Stellaolugbemi / Wikimedia Commons, CC BY-SA 4.0
The regulator will use eight criteria to decide when to lift price controls under section 167 of the Petroleum Industry Act, and is consulting on anti-competition rules.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority has fixed September 2028 as the target date to move Nigeria’s domestic gas market to a fully commercial, negotiated-pricing system. Chief Executive Rabiu Umar announced the target at a Gas Market Maturity Workshop under the government’s Decade of Gas programme in September 2026.
The legal basis
Section 167 of the Petroleum Industry Act 2021 envisages a transition from regulated domestic gas prices to prices agreed between willing buyers and willing sellers, once the market is sufficiently developed. Until now the Authority had not set a date. “This is the first time that we have been bold enough to set a clear target,” Umar said.
The criteria
The Authority will assess readiness against eight criteria: supply availability and diversity; the number and quality of buyers and sellers; access to transport infrastructure; contract strength; payment reliability; delivery obligations; market transparency; and credible price signals. It wants about 24 months to certify that the market has matured. Umar acknowledged that domestic supply remains tight and that pipeline projects such as Ajaokuta-Kaduna-Kano need enough molecules to be viable.
Competition rules
The Authority is consulting on draft Prevention of Anti-Competitive Practices and Behaviour Regulations 2026, which would prohibit coordinated pricing, supply restriction and market-sharing in the midstream and downstream sectors. About 20 sets of comments had been received by 21 September, and marketers have pushed back on some provisions. The Authority has signed a memorandum of understanding with the FCCPC on coordination.
Why it matters
Regulated domestic base prices and the domestic gas delivery obligation have limited the returns producers earn on gas sold locally compared with exports. A credible move to negotiated pricing would support investment in processing and pipelines, but also expose power generators and industrial users, including those relying on CNG, to higher costs. Gas sale and aggregation agreements being signed now should anticipate the transition, including price review clauses, take-or-pay terms and security for payment, given the payment arrears in the power sector.
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