The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has approved a fresh upward review of natural gas pricing for electricity generation firms, with the change taking effect from April 1, 2026.
In a circular to market participants, the regulator also updated the domestic base price and wholesale benchmarks for gas sold within Nigeria. The domestic base price serves as the minimum rate at which gas can be traded in the local market.
The new framework affects multiple segments. Commercial consumers will pay slightly more than before, while gas-intensive industries such as ammonia, urea, methanol and low sulphur diesel producers will operate within a revised pricing band set by the authority.
According to the NMDPRA, the review reflects current market conditions and follows the pricing principles established under the Petroleum Industry Act and existing gas pricing regulations. The agency said domestic gas prices must encourage upstream producers to supply the local market while remaining comparable to rates in similar gas-producing economies.
The adjustment comes as Nigeria’s power sector faces financial strain linked to gas supply and unpaid debts across the value chain. Gas suppliers have recently warned of possible supply disruptions to thermal plants over trillions of naira owed by generation companies.
In response, power producers maintain that they are also owed significant sums by the Federal Government, creating liquidity challenges throughout the industry.
Stakeholders say any rise in gas input costs could further pressure electricity generation if financial issues in the sector remain unresolved.
In recent months, the government has taken steps to clear legacy obligations. Plans were finalised in late 2025 for a multi-trillion-naira government-backed bond to settle verified debts owed to generation companies and gas suppliers.
Authorities also approved a separate payment to gas producers in December 2025 as part of efforts to stabilise supply.
Industry observers note that the new pricing regime will test the sector’s ability to balance higher input costs with the need to maintain steady power generation and industrial output.
