The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has set September 24, 2028 as the target date for Nigeria’s domestic gas market to transition fully to a willing buyer, willing seller framework.
The regulator also called on industry stakeholders to establish clear milestones and deliver the investments required to increase gas production, infrastructure and domestic consumption.
Mallam Rabiu Umar, Chief Executive of NMDPRA, disclosed this on Wednesday at the Gas Market Maturity Workshop organised under the Decade of Gas initiative at the Petroleum Technology Development Fund (PTDF), Abuja.
Umar said the transition would be guided by measurable conditions demonstrating the maturity of different segments of the domestic gas market, in line with the provisions of the Petroleum Industry Act (PIA).
He said the objective was to move the market from one largely coordinated through regulation towards a commercially driven system in which prices and transactions are increasingly determined by contracts between willing buyers and willing sellers.
“Invariably, this is the first time that we have been bold enough to set a clear target for our gas market transition,” Umar said.
According to him, the PIA provides for a gradual shift in the domestic gas market as commercial contracting and competition strengthen, allowing price regulation to recede as market conditions improve.
“The journey we are starting should lead us to a place where we should target a 24-month at best period within which we will be able to declare the market to be truly a willing buyer, willing seller market,” he said.
Umar stressed, however, that the transition could not be based simply on declarations of intent. It would require clearly defined indicators, thresholds and safeguards to determine whether the market was ready for liberalisation.
He identified supply availability and diversity, the number and quality of buyers and sellers, access to transportation infrastructure, the strength of commercial contracts, payment reliability, delivery obligations, availability of market information and credible price signals as key indicators of market maturity.
The NMDPRA chief executive also acknowledged that Nigeria’s domestic gas supply remained tight despite the country’s vast gas reserves.
He said infrastructure development must therefore be matched by adequate gas supply to ensure that new infrastructure can operate commercially.
“If you look at supply, for example, on the domestic side, it is still tight, no matter how you look at it. We have a lot of work to do in our infrastructure space. The focus right now is not just delivering the infrastructure, but ensuring that we have enough molecules to fill the pipeline,” he said.
He specifically pointed to major projects such as the Ajaokuta-Kaduna-Kano (AKK) pipeline, stressing the need to secure sufficient gas volumes to make such infrastructure commercially viable.
Umar said the role of the regulator would also evolve as the market matures, with greater emphasis on establishing market rules, ensuring fair access, protecting competition and monitoring market conduct.
To support this process, the Authority has commenced consultations on draft regulations dealing with anti-competitive practices. The proposed rules are intended to translate the competition provisions of the PIA into enforceable regulatory measures.
He also called for a realistic assessment of the different segments of Nigeria’s gas market, noting that they are at different stages of development. The transition, he said, would therefore have to be properly sequenced, with each segment assessed against specific readiness thresholds and safeguards.
