NMDPRA Maintains Current Natural Gas Prices For Strategic Domestic Market

CEO, NMDPRA, Farouk Ahmed

By Juliet Ukanwosu

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) says it is retaining the prevailing Domestic Base Price (DBP) and applicable gas wholesale price for the strategic domestic sectors of the Nigerian economy.

According to the regulator’s Corporate Communications and Stakeholder Management Department, its power over gas pricing is in compliance with its mandate as spelt out by the Petroleum Industry Act (PIA) 2021 which provides a clear regulatory framework for the determination of a market-based pricing regime for the domestic gas market in Nigeria.

“In line with Section 167, the Third and Fourth Schedule of the Act, the NMDPRA is obligated to determine the Domestic Base Price and the marketable wholesale price of natural gas supplied to the strategic sectors of the Nigerian gas sector,” the regulator said.

The Authority further clarified that the Domestic Base Price at the marketable gas delivery point under section 167(1) and other provisions of the PIA shall be determined based on regulations which incorporates among such other matters. They include principles such as the price must be of a level to bring forward sufficient natural gas supplies for the domestic market on a voluntary basis by the upstream; the price shall not be higher than the average of similar natural gas prices in major emerging countries that are significant producers of natural gas; lowest cost of gas supply based on three tier cost of supply framework and market related prices tied to international benchmarks

“Accordingly, the NMDPRA implemented the following towards the establishment of the DBP and applicable price for gas-based Industries: a) Conducted stakeholder engagement for review and establishment of the Gas Pricing and domestic demand regulations. b) Approved and Gazetted the Gas pricing and domestic demand regulations. c) Established DBP in line with provisions of the PIA. d) Established applicable price for gas-based industries. e) Collation and analysing of strategic stakeholder consultations on the DBP and applicable prices of natural gas, for emplacement of a fair market-based pricing regime for the strategic sector.

“In-view of the above, the NMDPRA hereby notifies all stakeholders, that while wider consultations and necessary efforts are being expedited towards emplacing the PIA prescribed strategic sector pricing framework, the extant price regime applicable to the domestic strategic sector, still applies,” a statement by the regulator maintained.

While expressing gratitude to investors in the domestic gas market sector, the Authority assured of the its commitment to ensuring transparency, deepening of the domestic gas market, and creating investor-friendly business environment, as it dutifully implement all the provisions of the new regulatory framework.

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