The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has fixed a September 2028 deadline to move the country’s domestic gas market to a fully commercial, negotiated-pricing system.
According to Rabiu Umar, chief executive of NMDPRA, the downstream agency will require the sector to meet a series of measurable benchmarks before lifting price controls.
‘Gas must be affordable for Nigerians while supporting President Ahmed Tinubu’s investment reforms,’ Umar said, adding that the timeline aligns with Nigeria’s broader goal of becoming a gas-powered economy by 2030.
The move marks the first time the regulator has set a firm date for the transition mandated under Section 167 of the 2021 Petroleum Industry Act, which envisions the domestic market gradually shifting from regulated pricing to one governed by commercial contracts between buyers and sellers.
‘Invariably, this is the first time that we have been bold enough to set a clear target for our gas market transition,’ Umar said Thursday at a Gas Market Maturity Workshop in the capital, organised under the government’s Decade of Gas program.
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Two-year runway
Umar said the regulator wants a roughly 24-month window in which to certify that the market has matured enough to be declared a genuine willing-buyer, willing-seller system.
‘The journey we are starting should lead us to a place where we should target 24 months at best within which we will be able to declare the market to be truly a willing buyer, willing seller market,’ he said.
The authority has identified eight criteria to judge readiness: 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.
Umar acknowledged that gas supply remains constrained despite Nigeria’s large reserves, a gap he said threatens the commercial viability of pipeline projects including the Ajaokuta-Kaduna-Kano line.
‘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.’
Licensing and competition rules
The regulator has begun consultations on draft anti-competitive-practices regulations meant to give teeth to the PIA’s competition provisions, Umar said.
Separately, he said NMDPRA is close to finishing its review of applications for gas distribution licenses, with approvals for qualified companies expected in the fourth quarter of 2026.
He said the agency also plans to expand domestic use of liquefied petroleum gas, liquefied natural gas and compressed natural gas, arguing that higher local consumption would cut reliance on imports and reduce losses tied to long-distance power transmission.
Investment in gas projects hinges on regulatory predictability, he added, since financiers typically require long-term offtake agreements before committing capital.
‘For you to take an FID in a gas investment, you need to have a long-term contract,’ Umar said.
Industry Reaction
Ed Ubong, coordinating director of the Decade of Gas Secretariat, said the 2028 target is achievable and pointed to a goal of lifting gas supply to 12.6 billion cubic feet a day by 2030, backed by 16 infrastructure projects and more than 60 demand-side projects that could add roughly 15 billion cubic feet a day in consumption.
Yetunde Taiwo, president of the Nigerian Gas Association, welcomed the timeline but urged the regulator to sequence the transition carefully.
‘As NGA, what we would like to see really is to see those goalposts, those milestones that have been set, that make it a realistic journey for us to say we have achieved a willing buyer, willing seller status,’ she said.
Taiwo said Nigeria has made progress over the past decade but that the shift will require closer coordination among government, regulators and industry, with government setting policy direction, regulators enforcing predictable rules, and companies continuing to invest and deliver projects.