Gas Price Rises to $2.18 Per MMBtu
The Nigerian Midstream and Downstream Petroleum Regulatory Authority has announced an upward adjustment in the Domestic Base Price of natural gas, setting the new rate at $2.18 per Million British Thermal Units effective April 1, 2026.
The new pricing structure represents a five-cent increase from the 2025 rate of $2.13 per MMBtu applicable to power generation companies, translating to approximately a 2.35 per cent rise year-on-year. Commercial users will now pay $2.68 per MMBtu, up from $2.63 in the previous year.
In a statement released on Tuesday, the regulatory agency said the adjustment was informed by statutory provisions and prevailing market realities. The authority stated, “Taking into cognisance the provisions of the Petroleum Industry Act, market realities, as well as the gazetted Gas Pricing and Domestic Demand Regulations, the NMDPRA hereby establishes the new Domestic Base Price as $2.18/MMBtu.”
The Domestic Base Price represents the minimum rate at which natural gas can be sold within the domestic market. The regulator explained that the pricing applies to gas supplied to power generation companies and industrial users, while gas-based industries will be charged based on an established regulatory formula.
The Petroleum Industry Act 2021 provides the legal framework for gas pricing in Nigeria, mandating the NMDPRA to periodically review domestic gas prices to reflect market dynamics while ensuring security of supply. The gazetted Gas Pricing and Domestic Demand Regulations further outline the methodology for determining the Domestic Base Price.
The price revision comes as Nigeria continues to grapple with challenges in the power sector, where natural gas accounts for over 70 per cent of electricity generation. Industry observers note that adjustments to gas prices typically have downstream implications for electricity tariffs, which are also subject to periodic review by the Nigerian Electricity Regulatory Commission.
The NMDPRA stated that the move is aimed at ensuring adequate gas supply to the domestic market while maintaining investor confidence in the midstream and downstream petroleum sector. The regulator said the new pricing will guide gas supply and pricing arrangements going forward.
The authority had previously maintained the Domestic Base Price at $2.13 per MMBtu throughout 2025, following a period of relative stability in the domestic gas market. The latest adjustment reflects ongoing efforts to align domestic pricing with export parity values, a key consideration under the PIA’s framework for commercialising Nigeria’s vast gas reserves.
Nigeria holds an estimated 209 trillion cubic feet of proven natural gas reserves, ranking among the top ten countries globally. The domestic gas market has seen increased activity in recent years, driven by government policies aimed at deepening gas utilisation for power generation, industrialisation, and export through liquefied natural gas and liquefied petroleum gas channels.