AfriPulse
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has increased the price of natural gas for power generation companies to $2.18 per metric million British thermal units (MMBTU), effective April 1, 2026.
The new price represents a $0.05 increase from the previous rate of $2.13/MMBTU.
The adjustment was announced in a circular issued by the regulator on Tuesday.
The authority also released updated domestic base price (DBP) and wholesale gas prices for the domestic market, in line with provisions of the Petroleum Industry Act (PIA) and prevailing market conditions.
The DBP serves as the minimum price at which natural gas can be sold within Nigeria.
What the agency is saying
The revised pricing structure reflects a marginal increase across key gas segments in the domestic market.
- “Accordingly, taking into cognizance the provisions of the PIA, market realities, as well as the gazetted Gas Pricing and Domestic Demand Regulations, the NMDPRA hereby establishes the new Domestic Base Price as USD 2.18/MMBTU… effective 1st April, 2026.”
- Commercial users will now pay $2.68/MMBTU, up from the previous $2.63/MMBTU.
- Gas-based industries such as ammonia, urea, methanol, and low sulphur diesel will operate within a price band of $0.9/MMBTU (floor) and $2.18/MMBTU (ceiling).
The adjustments indicate a gradual upward movement in domestic gas pricing, reflecting both regulatory considerations and market realities.
More insights
The NMDPRA stated that the domestic base price is determined based on key principles outlined in the Petroleum Industry Act.
- Prices must incentivise upstream producers to supply sufficient gas to the domestic market on a voluntary basis.
- Pricing must not exceed the average gas prices in comparable emerging economies that are major producers.
- The framework also considers the lowest cost of supply and aligns prices with international benchmarks.
These guidelines are designed to balance affordability for domestic users with the need to attract investment into gas production and supply.
Context
The price increase comes at a time when Nigeria’s power sector is facing significant financial challenges, particularly around gas supply and outstanding debts.
- On March 18, Joy Ogaji, chief executive officer (CEO) of the Association of Power Generation Companies (APGC), said gas firms are planning to stop supply to thermal power plants over an estimated N3.3 trillion debt owed by generation companies (GenCos).
- Gas suppliers have warned of a possible halt in supply to thermal power plants over an estimated N3.3 trillion debt owed by power generation companies (GenCos).
- GenCos say the Federal Government owes them about N6.5 trillion, further straining the sector.
- Any increase in gas prices could add pressure to electricity generation costs and overall power supply stability.
The new pricing regime is expected to have implications for power generation and industrial production, as stakeholders navigate rising costs alongside existing financial constraints in the energy sector.
What you should know
In October 2025, Nairametrics reported that the Federal Government had concluded implementation frameworks for a N4 trillion government-backed bond aimed at settling verified arrears owed to power generation companies and gas suppliers.
Nairametrics also reported that the Federal Government’s plan to issue up to N4 trillion in government-backed bonds to settle legacy debts owed to Gencos and gas suppliers triggered concerns over its risky debt-for-debt strategy.
In December 2025, the federal government approved the settlement of N185 billion owed to natural gas producers.
Olalekan Adigun
Olalekan Adigun is a seasoned political analyst and writer with extensive experience in crafting compelling narratives and executing strategic initiatives. Known for his insightful commentary on governance, policy, and socio-economic issues, he has contributed to various national and international platforms.
Source: Nairametrics | Read the Full Story…
