The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has introduced revised price sets for companies operating in the power sector and commercial users in 2024, impacting gas purchases across the board.
According to a statement released on Tuesday by Farouk Ahmed, the Chief Executive of NMDPRA, companies within the power sector are now set to procure wholesale gas at a rate of $2.42 per million British thermal units (MMBTU), while commercial entities will see a price of $2.92 per MMBTU for natural gas transactions.
This latest development is anchored in the new Petroleum Industry Act (PIA) as highlighted in the official announcement by the regulatory body.
The statement further elucidated on the regulatory guidelines provided by the PIA, emphasizing the NMDPRA’s authority to define the Domestic Base Price (DBP) and establish marketable wholesale prices for natural gas supplies to critical sectors.
In compliance with Section 167 and the relevant schedules of the PIA 2021, the NMDPRA solidified the Year 2024 Domestic Base Price at USD 2.42 per MMBTU post considerable consultations with industry stakeholders and a meticulous review of sanctioned Gas Pricing and Domestic Demand Regulations.
Moreover, the NMDPRA has set minimum rates for gas-reliant industries like ammonia, methanol, and low-sulphur diesel producers at $0.90 MMBTU, with an upper limit of $2.42 MMBTU.
The adjustment in domestic gas pricing could potentially translate to an upsurge in electricity tariffs, given that nearly 70% of Nigeria’s electricity output is derived from natural gas sources.