In a recent announcement, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has introduced new price adjustments for natural gas, particularly for power generation companies.
The Chief Executive of NMDPRA, Farouk Ahmed, revealed that these changes come in accordance with the Petroleum Industry Act 2021, which was signed into law by President Bola Tinubu on August 16, 2021.
The new rates, effective for 2024, see an increase in the domestic base price to $2.42 per metric million British thermal units (mmbtu), up from the previous rate of $2.18mmbtu. Additionally, the cost of commercial gas has been adjusted to $2.92mmbtu, from the previous $2.5mmbtu.
Ahmed explained that these adjustments are in line with the regulations outlined in the Petroleum Industry Act 2021, specifically Section 167 and its accompanying schedules, which mandate the regulator to determine pricing frameworks for the domestic gas market.
According to Ahmed, the pricing principles incorporate considerations such as ensuring sufficient natural gas supplies for the domestic market, aligning prices with international benchmarks, and maintaining competitiveness with similar gas prices in major emerging countries.
The NMDPRA emphasized that these adjustments were made following consultations with stakeholders and are aimed at promoting a market-based pricing regime as outlined in the Petroleum Industry Act and Gas Pricing Regulations.
