By: Tijani Salako.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has increased the price of natural gas for power generation companies to $2.18 per metric million British thermal units (MMBTU), with effect from April 1, 2026.

The adjustment was announced in a circular obtained from the authority’s official X account on Tuesday as the new rate reflects a $0.05 increase from the previous price of $2.13/MMBTU.

The regulator also released updated domestic base price (DBP) and wholesale gas prices for the domestic market, in line with the provisions of the Petroleum Industry Act (PIA) and prevailing market conditions. The DBP serves as the minimum price at which natural gas can be sold within Nigeria.

According to the agency, the revised pricing structure reflects a marginal increase across key gas segments in the domestic market. It stated that “taking into cognizance the provisions of the PIA, market realities, as well as the gazetted Gas Pricing and Domestic Demand Regulations, the NMDPRA hereby establishes the new Domestic Base Price as USD 2.18/MMBTU, effective 1st April, 2026.”

Under the new framework, commercial users will now pay $2.68/MMBTU, up from the previous $2.63/MMBTU. Gas-based industries such as ammonia, urea, methanol and low sulphur diesel will operate within a price band of $0.9/MMBTU as the floor and $2.18/MMBTU as the ceiling.

The adjustments signal a gradual upward movement in domestic gas pricing, reflecting both regulatory considerations and current market realities. The authority explained that the domestic base price is determined based on key principles outlined in the PIA, including the need to incentivise upstream producers to supply sufficient gas to the domestic market on a voluntary basis.

It added that pricing must not exceed the average gas prices in comparable emerging economies that are major producers, while also considering the lowest cost of supply and aligning with international benchmarks. These guidelines are aimed at balancing affordability for domestic users with the need to attract investment into gas production and supply.

The price increase comes amid mounting financial challenges in Nigeria’s power sector, particularly around gas supply and outstanding debts. On March 18, Joy Ogaji, chief executive officer of the Association of Power Generation Companies (APGC), said gas firms were planning to halt supply to thermal power plants over an estimated N3.3 trillion debt owed by generation companies.

Gas suppliers have warned of a possible disruption in supply to thermal plants over the same debt concerns, while generation companies say the Federal Government owes them about N6.5 trillion, further deepening the sector’s financial strain.

Industry watchers say any increase in gas prices could further raise electricity generation costs and affect power supply stability. The new pricing regime is therefore expected to have implications for both power generation and industrial production, as stakeholders grapple with rising costs alongside existing constraints in the energy sector.