• Saturday, May 25, 2024
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NMDPRA maintains current natural gas prices for domestic market

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The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) will maintain the existing Domestic Base Price (DBP) and relevant wholesale gas prices for crucial domestic sectors of the Nigerian economy.

As stated by the regulator’s Corporate Communications and Stakeholder Management Department, its authority in gas pricing aligns with the mandate outlined in the Petroleum Industry Act (PIA) 2021.

The PIA establishes a transparent regulatory framework for establishing a market-based pricing system for the domestic gas market in Nigeria.

“In line with Section 167, the Third and Fourth Schedule of the Act, the NMDPRA is obligated to determine the Domestic Base Price and the marketable wholesale price of natural gas supplied to the strategic sectors of the Nigerian gas sector,” the regulator said.

In addition, the NMDPRA has clarified that the determination of the Domestic Base Price at the marketable gas delivery point, as outlined in section 167(1) and other provisions of the PIA, will be based on regulations.

These regulations encompass various considerations, including principles such as ensuring the price encourages sufficient natural gas supplies for the domestic market voluntarily provided by the upstream; the price should not exceed the average of comparable natural gas prices in major emerging countries with significant natural gas production; the lowest cost of gas supply based on a three-tier cost of supply framework; and market-related prices tied to international benchmarks.

“Accordingly, the NMDPRA implemented the following towards the establishment of the DBP and applicable price for gas-based Industries: a) Conducted stakeholder engagement for review and establishment of the Gas Pricing and domestic demand regulations. b) Approved and Gazetted the Gas pricing and domestic demand regulations. c) Established DBP in line with provisions of the PIA. d) Established applicable price for gas-based industries. e) Collation and analysing of strategic stakeholder consultations on the DBP and applicable prices of natural gas, for emplacement of a fair market-based pricing regime for the strategic sector.

“In-view of the above, the NMDPRA hereby notifies all stakeholders, that while wider consultations and necessary efforts are being expedited towards emplacing the PIA prescribed strategic sector pricing framework, the extant price regime applicable to the domestic strategic sector, still applies,” a statement by the regulator maintained.

The Authority appreciates domestic gas market investors and pledges commitment to transparency, fostering growth in the market, and cultivating an investor-friendly business environment by diligently implementing the new regulatory framework.