Nigerian govt raises gas price for GenCos to $2.18/MMBTU

THE Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has increased the price of natural gas supplied to power generation companies (GenCos) to $2.18 per metric million British thermal units (MMBTU), marking a $0.05 rise from the previous $2.13/MMBTU.

The adjustment was disclosed in a circular issued on Tuesday, where the regulator outlined the new domestic base price (DBP) and wholesale gas prices for 2026. The DBP represents the minimum benchmark at which gas can be sold within Nigeria’s domestic market.

According to the directive, the revised pricing structure will come into force from April 1, 2026. The agency noted that the decision reflects provisions of the Petroleum Industry Act (PIA), prevailing market conditions, and existing gas pricing regulations.

In the circular signed by Chief Executive Officer of the NMDPRA, Mr Saidu Mohammed, commercial consumers will now pay $2.68/MMBTU, up from $2.63/MMBTU.

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The regulator also set pricing thresholds for gas-based industries such as ammonia, urea, methanol, and low sulphur diesel. These sectors will pay a floor price of $0.9/MMBTU and a ceiling price of $2.18/MMBTU.

The NMDPRA explained that under Section 167(1) of the PIA, the domestic base price at the marketable gas delivery point must follow key principles. These include ensuring prices are sufficient to encourage upstream producers to supply gas voluntarily to the domestic market, while remaining competitive with gas prices in comparable emerging economies.

The framework also requires that prices reflect the lowest cost of supply based on a three-tier structure and align with international benchmarks.

The price increase is expected to have implications for Nigeria’s power sector, particularly for generation companies already weighed down by debt challenges.