The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has announced a new base gas price for companies in the power sector and commercial users, effective for the year 2024.
In a statement signed by Farouk Ahmed, Chief Executive of NMDPRA, it was disclosed that companies in the power sector will now pay $2.42 per MMBTU for wholesale gas purchases, while commercial users will acquire natural gas at $2.92 per MMBTU.
The NMDPRA cited provisions of the Petroleum Industry Act (PIA) 2021 as the legal basis for its decision, emphasizing the Act’s regulatory framework for determining market-based pricing in the domestic gas market.
According to the statement, the NMDPRA, mandated by the PIA, conducted consultations with stakeholders and considered the gazetted Gas Pricing and Domestic Demand Regulations before establishing the Year 2024 Domestic Base Price at USD 2.42 per MMBTU.
Furthermore, the NMDPRA set floor prices for gas-based industries, such as producers of ammonia, methanol, and low sulfur diesel, at $0.90 per MMBTU, with a ceiling price of $2.42 per MMBTU.
In 2024, the federal government, through the Nigeria Electricity Regulatory Commission (NERC), plans to allocate N1.67 trillion to subsidize electricity, marking a significant 170% increase compared to the previous year’s figure.
This announcement underscores the regulatory measures taken to streamline the pricing of natural gas in Nigeria and ensure sustainability in the energy sector, albeit with potential implications for electricity costs and government subsidies.
