By Ukumbi Afrika 
Thursday, 13 August 2026
Lagos— Nigeria is targeting a transition from regulated domestic gas pricing to a market-driven system within the next one to two years as gas infrastructure expands and competition increases, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said.
NMDPRA chief Rabiu Umar said the regulator is guiding an orderly transition toward a “willing buyer, willing seller” framework for natural gas pricing, consistent with the Petroleum Industry Act (PIA).
The move would mark a significant shift in Nigeria's domestic gas market, where government-administered pricing remains in place for strategic sectors such as power generation and certain gas-based industries.
Infrastructure Key to Liberalisation
Gas producers have pushed for faster price liberalisation, but the government has argued that the market requires further development.
Pipeline shortages, transportation bottlenecks and limited access to buyers and sellers have continued to constrain competition and prevent the full emergence of a commercially driven gas market.
Umar said the expansion of pipeline networks and broader participation by gas producers and consumers should allow prices to increasingly be determined through commercial negotiations rather than regulatory mechanisms.
The planned transition could provide stronger price signals for producers while potentially encouraging new investment in gas production, transportation and processing infrastructure.
A more market-based gas pricing system could:
Encourage investment in domestic gas production.
Improve incentives for pipeline and transportation infrastructure.
Strengthen competition among gas suppliers and buyers.
Support the development of Nigeria's gas-to-power and gas-based industries.
Gradually reduce government involvement in setting prices.
However, the success of the transition will depend heavily on improving gas transportation infrastructure and ensuring sufficient market access for both producers and consumers.
Source: Reuters
Reporting: Isaac Anyaogu
Editing: Susan Fenton