Business News
FG hikes natural gas price for power firms
The federal government has increased the price of natural gas supplied to power generation companies to $2.18 per million British thermal units (MMBTU).
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said the new price will take effect from April 1, 2026.
This represents a $0.05 increase from the previous rate of $2.13/MMBTU, according to a circular issued by NMDPRA on Tuesday.
The regulator also announced the updated Domestic Base Price (DBP) and wholesale gas pricing for the domestic market, serving as the minimum price for gas sales within Nigeria, has been set at $2.18/MMBTU.
Similarly, commercial users will now pay $2.68/MMBTU, up from $2.63/MMBTU.
Gas-based industries, including ammonia, urea, methanol, and low-sulfur diesel producers, will operate within a price band ranging from a floor of $0.9/MMBTU to a ceiling of $2.18/MMBTU.
Impact on the power sector
The new gas pricing would further impact the country’s already strained power sector, especially for generation companies.
The price hike comes at a time GenCos recently lamented gas shortage challenges due to unpaid debts to gas suppliers.
Recall that the chief executive of the Association of Power Generation Companies said the federal government owed its members’ debt amounting to N6 trillion; however, the minister of power, Adebalu, disputed the figure.
The latest gas price to Gencos may worsen the country’s power sector ‘gas constraint’ challenge.
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