BREAKING: Federal Government Sets New Gas Prices For Electricity Generating Companies

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), announced a revision in the pricing of natural gas for power generation companies for the year 2024.

Reflecting changes in the global and domestic energy markets, the new domestic base price for natural gas has been adjusted to $2.42 per metric million British thermal units (mmbtu) from its previous rate of $2.18mmbtu.

Additionally, the price for commercial gas saw an increase, setting it at $2.92mmbtu, up from $2.5mmbtu.

This adjustment aligns with the directives of the Petroleum Industry Act 2021, a key legislation endorsed by President Bola Tinubu, which aims to establish a market-driven pricing mechanism for the domestic gas sector. The Chief Executive of NMDPRA, Farouk Ahmed, highlighted the act’s role in providing a robust regulatory framework that supports the determination of prices based on market dynamics while ensuring that domestic gas prices remain competitive when compared to major emerging natural gas producers globally.

The rationale behind the new pricing strategy includes ensuring adequate supply of natural gas for the domestic market, aligning prices with international benchmarks, and considering the cost of gas supply within a three-tier framework. The NMDPRA’s decision was made following thorough consultations with stakeholders, demonstrating a commitment to transparency and stakeholder engagement in the regulatory process.