Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had retained the prevailing Domestic Base Price (DBP) and applicable gas wholesale price for the domestic sectors of the Nigerian economy.
According to the Corporate Communications and Stakeholder Management Department of the agency, its power over gas pricing is in compliance with its mandate as spelt out by the Petroleum Industry Act (PIA) 2021, assented to by the President on the August 16, 2021, which provides a clear regulatory framework for the determination of a market-based pricing regime for the domestic gas market in Nigeria.
The agency explained: “In line with Section 167, the Third and Fourth Schedules of the Act, Nigerian Midstream & Downstream Petroleum Regulatory Authority (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.”
It also explained that the Domestic Base Price at the marketable gas delivery point under Section 167(1) and other provisions of PIA shall be determined based on regulations, such as the price must be of a level to bring forward sufficient natural gas supplies for the domestic market on a voluntary basis by the Upstream; the price shall not be higher than the average of similar natural gas prices in major emerging countries that are significant producers of natural gas; lowest cost of gas supply based on three tier cost of supply framework and market related prices tied to international benchmarks.
The agency expressed gratitude to the investors in the domestic gas market sector and assure them of the NMDPRA’s commitment to ensuring transparency, deepening of the domestic gas market, and creating investor-friendly business environment, as it dutifully implement all the provisions of the new regulatory framework.
