The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has established September 24, 2028, as the target date for Nigeria’s domestic gas market to move to a fully established willing buyer, willing seller framework.
This regulatory shift intends to deregulate the domestic gas sector, allowing market forces rather than government-administered pricing to determine the cost of gas transactions. Under the new framework, producers and consumers will have the autonomy to negotiate prices and terms based on prevailing market conditions.
The announcement, detailed in a recent regulatory update, aims to address long-standing challenges in the gas value chain, including supply volatility and underinvestment in midstream infrastructure.
Shifting from regulated to market-driven pricing
For years, the Nigerian gas market has operated under various regulatory pricing mechanisms designed to ensure affordability for critical sectors like power generation. However, these controlled prices have often failed to reflect the actual cost of production and distribution, frequently leading to supply shortages and discouraged investment from both indigenous and international energy companies.
The transition to a willing buyer, willing seller model is expected to provide the price certainty required to attract large-scale capital into the gas sector. By allowing for true price discovery, the NMDPRA intends to incentivise gas producers to expand their capacity and improve the reliability of gas delivery to industrial clusters and power plants.
The 2028 timeline provides a four-year window for stakeholders to adjust to the changing regulatory landscape. This period will likely involve the development of more robust trading platforms, the refinement of gas infrastructure, and the establishment of clearer contractual standards to protect both parties during negotiations.
The move aligns with the objectives of the Petroleum Industry Act (PIA), which seeks to foster a competitive and transparent energy market. As Nigeria seeks to leverage its vast gas reserves through the “Decade of Gas” initiative, the shift toward a deregulated market is viewed as a necessary step to ensure that gas becomes a viable feedstock for manufacturing, fertiliser production, and electricity generation.
The regulator is expected to release further technical guidelines and implementation roadmaps to guide stakeholders through the transition period before the September 2028 deadline.
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