By CHIKA IZUORA, ANDREW OJIEZEL, OLAMIDE OJUOKAIYE, ABIODUN SIVOWAKU, Lagos Stakeholders and power sector analysts have expressed deep concern on the impact of gas market liberalisation which was recently announced by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The regulator recently announced plans to fully liberalise Nigeria’s domestic gas sector by September 24, 2028.
Under this framework, the regulator will completely phase out price regulations, transitioning the industry into a fully commercial “willing-buyer, willing-seller” market. Announced by NMDPRA chief executive, Rabiu Abdullahi Umar, at a gas market maturity workshop in Abuja, this strategic shift aligns with the federal government’s “Decade of Gas” initiative, which aims to power Nigeria’s economy predominantly through gas by 2030.
However, reacting on this, the executive director and convener of PowerUp Nigeria an electricity consumer rights and policy advocacy organization in Nigeria, Adetayo Adegbemle, said this will essentially mean that power generation companies would be forced to pay for gas to run their plants and in such situations it will now look for guarantee offtakers. Adegbemle, also cautioned that though the policy is what has been advocated for since 2023, but since the Distribution Companies (GenCos) have been unable to recover money for electricity supplied they run the risk of not being able to operate efficiently.
He also, suggested that the National Electricity Regulatory Commission (NERC) may have to review its maximum demand customer policy. He said he has consistently advocated for the full removal of electricity subsidies by the federal government to attract private investments and improve sector liquidity, which the policy would further address. On his part, a lawyer and power sector analyst, and former assistant general manager of Regulatory Compliance.
Jos Electricity Distribution (JED), Moshood Sanusi Yusuf, while speaking with our correspondent, feared that if a proper mechanism is not put in place the power sector inefficiencies will increase as operators in the downstream sector of the industry (DisCos) would not effectively manage the supply chain. Yusuf, from his experience said the plan means that the gas market will translate to automated contract between gas producers and the GenCos.
He said he feared the sustainability of the policy given the market inefficiencies and warned that many companies may likely wind down. Meanwhile, a recent market check by LEADERSHIP across parts of Lagos illustrated the pressure households are already facing in another segment of the gas market. The price of liquefied petroleum gas (LPG), popularly known as cooking gas, ranged from N1,250 to N1,400 per kilogramme at some outlets visited by our correspondents, while availability also varied from one location to another.
At a mobile gas station around Anthony, LPG sold for N1,250 per kilogramme, while a consumer identified as Mama Joshua said she purchased the product at N1,400 per kilogramme at Beesam. At the higher price, filling a 12.5kg cylinder would cost about N17,500, compared with N15,625 at the lower rate. For consumers, the challenge is not only the absolute price but also the uncertainty created by differences between outlets.
Blessing Njoku, a Lagos resident, said families in the Berger area are finding it increasingly difficult to budget for cooking gas because prices could change between purchases. “The price keeps changing, and it is not easy for a family that uses gas regularly. You may have a particular amount in mind, only to get to the gas station and discover that the price has increased. This has become something worrisome not only to me but to my neighbours as well, she said.
Another consumer, Kunle, said buyers were increasingly forced to compare prices among outlets before refilling their cylinders. “There is a difference from one place to another. If you have the time, you can check two or three places, but if the gas is finished at home, you have no choice but to buy where you find it,” he said. The pressure is also influencing purchasing behaviour.
Tolu said some households were buying smaller quantities rather than filling their cylinders whenever the full cost became unaffordable. “Sometimes, you just buy the amount you can afford. You may want to fill the cylinder, but after calculating the cost, you decide to buy less and manage it,” she said. She added that households with several dependants were particularly affected because cooking remained an unavoidable daily expense.
“Cooking is something you cannot avoid. Even when the price increases, you still need to buy it. The only difference is that you start looking for ways to make the gas last longer,” she said. The availability problem was also evident at an outlet on Ashabi Cole Street, by Cadbury, where LPG was unavailable during the market check. Along the Lagos-Ibadan Expressway corridor, prices also differed, with checks showing N1,900 per kilogramme at Conoil, Magboro, compared with N1,400 at Cosy Cookwave and Julanky filling station in Arepo.
Although LPG pricing is not the same as the regulated domestic gas pricing framework being transitioned by NMDPRA, the experience provides an indication of the sensitivity of Nigerian consumers to changes in the gas value chain. Recent NMDPRA data have also shown that domestic LPG supply and availability remain uneven despite improvements in local production. The bigger question for the 2028 reform is therefore whether market liberalisation will be accompanied by enough investment and supply growth to prevent consumers from bearing the immediate burden of higher input costs.
However, for the power sector, CNG operators, manufacturers and households, the outcome will depend less on the announcement of a new pricing regime than on what happens to the fundamentals of the gas market production, infrastructure, transportation, contracting, payment discipline and competition. NMDPRA has indicated that the 2028 deadline is conditional on these market-readiness factors rather than simply an overnight removal of regulation.
The authority has also stressed the need for gas to remain affordable even as investment incentives are strengthened. However, Umar said the transition would be based on measurable conditions that demonstrate the maturity of different segments of the gas market, in line with the provisions of the Petroleum Industry Act. “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,” he stated. He said the PIA envisaged a shift from a market largely coordinated through regulation to one driven increasingly by commercial contracts between willing buyers and willing sellers. “Invariably, this is the first time that we have been bold enough to set a clear target for our gas market transition,” he noted.
According to Umar, the authority was targeting a 24-month period to establish the conditions required to declare the market a fully functioning willing-buyer, willing-seller market. “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 stressed that the transition must not be based on broad statements of intent but on clearly defined indicators, thresholds and safeguards. Umar identified supply availability and diversity, the number and quality of buyers and sellers, access to transportation infrastructure, strength of contracts, payment reliability, delivery obligations, market information and credible price signals as key indicators of market maturity.
The NMDPRA boss, however, said Nigeria’s domestic gas supply remained tight despite the country’s vast gas resources, stressing that infrastructure development must be matched by sufficient gas molecules to utilise the infrastructure. “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 stressed the need to ensure that major gas infrastructure projects, including the Ajaokuta-Kaduna-Kano pipeline, had sufficient gas supply to make them commercially useful. He said the role of the regulator would also evolve as the market developed, with greater emphasis on establishing market rules, ensuring fair access, protecting competition and monitoring market conduct.
The NMDPRA chief executive disclosed that the authority had commenced consultations on draft regulations on anti-competitive practices, aimed at translating the competition provisions of the PIA into enforceable regulatory rules. He also called for a realistic assessment of the different segments of the Nigerian gas market, noting that they were at different stages of development.
According to him, the sequencing of the transition would require determining which market segments were ready to move first, the thresholds they must meet and the safeguards required before liberalisation. Umar further disclosed that the authority was nearing the conclusion of the process for the issuance of gas distribution licences, with the exercise expected to be completed in the coming weeks.
He said qualified companies would be issued gas distribution licences in the fourth quarter of 2026. The NMDPRA boss also said the authority was working to deepen domestic utilisation of liquefied petroleum gas and liquefied natural gas, stressing that increased domestic utilisation of the country’s gas resources would be an important indicator of economic growth. He said the government was also seeking to expand the use of compressed natural gas, while several LNG and gas-to-power projects were being developed across the country.
According to him, greater domestic gas utilisation could support power generation, reduce dependence on imports and minimise transmission losses associated with moving electricity over long distances. He added that the authority was committed to creating a predictable, coherent and transparent regulatory environment capable of attracting long-term investment into the gas sector.
Umar said gas projects required substantial upfront investment and long-term contracts before investors and financiers could commit capital. “For you to take an FID in a gas investment, you need to have a long-term contract,” he said, adding that the authority was willing to engage with individual projects to identify regulatory measures that could support their development. Also speaking, the Coordinating Director of the Decade of Gas Secretariat, Ed Ubong, said Nigeria could achieve a willing-buyer, willing-seller gas market before the end of the first horizon of the Decade of Gas programme in 2030.
Ubong said the programme had identified clear markers for achieving the target, including increasing gas supply to 12.6 billion cubic feet per day by 2030. He said 16 key infrastructure projects were expected to support the growth of the gas market, while more than 60 projects capable of creating about 15 billion cubic feet per day of gas demand had been identified on the demand side.
He noted that a mature gas market would also require the development of a successful gas-to-power market and greater access to cooking gas. In her speech, the President of the Nigerian Gas Association, Engr. Mrs Yetunde Taiwo, said the transition to a willing-buyer, willing-seller market must be driven by clearly defined milestones. Taiwo said the NGA had consistently advocated for a commercially driven gas market but stressed that the transition must be properly sequenced to avoid moving either prematurely or too slowly.
“As NGA, what we would like to see really is to see those goalposts, those milestones that have been set, that makes it a realistic journey for us to say we have achieved a willing buyer, willing seller status.” According to her, Nigeria had made significant progress in the gas industry over the past decade, but substantial work remained to be done. She called for stronger collaboration between government, regulators and industry, with government providing clear policy direction, regulators establishing predictable rules, and industry continuing to invest, innovate and execute projects.
Taiwo said the ultimate objective should be a gas market capable of attracting investment, encouraging greater participation and delivering reliable gas to industries, businesses and consumers
