Fresh gas price hike hits Nigeria’s power sector

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has increased the price of natural gas for power companies to $2.18 per MMBTU, starting from April 1, 2026.

This is a small increase of $0.05 from the previous price of $2.13/MMBTU. The new rate was announced in an official circular released by the regulator.

The agency also updated gas prices for the domestic market in line with the Petroleum Industry Act (PIA) and current market conditions.

The Domestic Base Price (DBP), which is the minimum price for gas in Nigeria, is now set at $2.18/MMBTU.

Breakdown of new prices

Commercial users will now pay $2.68/MMBTU, up from $2.63

Gas-based industries (like ammonia, urea, and methanol producers) will pay within a range of $0.9 to $2.18/MMBTU

Why the price was increased

According to NMDPRA, the new pricing reflects market realities and follows guidelines in the Petroleum Industry Act. The agency explained that:

Prices should encourage gas producers to supply more gas locally

Prices should not be higher than those in similar developing countries

Prices should reflect the cost of supply and global market trends

The goal is to balance affordable gas prices with the need to attract investment into the sector.

Impact on the power sector

This increase comes at a difficult time for Nigeria’s power sector, which is already facing financial challenges.

Gas suppliers have warned they may stop supplying gas to power plants because power generation companies owe about ₦3.3 trillion. At the same time, the Federal Government owes these power companies around ₦6.5 trillion.

Any increase in gas prices could make electricity generation more expensive and may affect power supply across the country.

Background

The government has been trying to solve the debt problem in the sector:

It planned a ₦4 trillion bond to clear debts owed to power companies and gas suppliers

In December 2025, it approved payment of ₦185 billion to gas producers

Despite these efforts, financial pressure in the energy sector remains high.

What this means

The new gas pricing is expected to:

Increase costs for power generation

Affect industries that rely on gas

Add more pressure to Nigeria’s already struggling energy sector

Overall, stakeholders will need to adjust to rising costs while dealing with existing debt challenges.