…New $2.18 Per MMBtu price template takes effect April 1
By Dickson Pat
Nigerians may face fresh economic pressure following a new increase in domestic gas prices, a move expected to ripple across electricity tariffs, manufacturing costs, and overall cost of living.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority ,NMDPRA, on Tuesday announced a rise in the Domestic Base Price of natural gas to $2.18 per MMBtu, effective April 1, 2026, up from $2.13/MMBtu in 2025.
While the adjustment represents a modest increase of 5%, or about 2.35% its broader implications for households and businesses could be significant, particularly in an economy already grappling with inflation and rising energy costs.
The regulator said the review was carried out in line with the Petroleum Industry Act, existing gas pricing regulations, and prevailing market realities.
However, analysts warn that even marginal increases in gas pricing tend to have a multiplier effect across key sectors of the economy.
Gas remains the backbone of Nigeria’s power sector, accounting for more than 70% of electricity generation.
As a result, any increase in gas prices is likely to push up the cost of power generation, which could eventually be passed on to consumers through higher electricity tariffs.
For many Nigerians already struggling with rising utility bills, the development signals the possibility of deeper financial strain in the coming months.
Beyond electricity, industries that rely heavily on gas including manufacturing, cement, and food processing are also expected to face higher production costs.
The authority also released updated domestic base price ,DBP, and wholesale gas prices for the domestic market, in line with 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.
The revised pricing structure reflects a marginal increase across key gas segments in the domestic market.
This could translate into increased prices of goods and services, further squeezing consumers.
“Accordingly, taking into cognizance the provisions of the PIA, market realities, as well as the gazette Gas Pricing and Domestic Demand Regulations, the NMDPRA hereby establishes the new Domestic Base Price as USD 2.18/MMBTU… effective 1st April, 2026″.
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 (floor) and $2.18/MMBTU (ceiling).
The adjustments indicate a gradual upward movement in domestic gas pricing, reflecting both regulatory considerations and market realities.
The NMDPRA stated that the domestic base price is determined based on key principles outlined in the Petroleum Industry Act.
Prices must incentivise upstream producers to supply sufficient gas to the domestic market on a voluntary basis.
Pricing must not exceed the average gas prices in comparable emerging economies that are major producers.
The framework also considers the lowest cost of supply and aligns prices with international benchmarks.
These guidelines are designed to balance affordability for domestic users with the need to attract investment into gas production and supply.
The price increase comes at a time when Nigeria’s power sector is facing significant financial challenges, particularly around gas supply and outstanding debts.
On March 18, Joy Ogaji, chief executive officer ,CEO, of the Association of Power Generation Companies ,APGC, said gas firms are planning to stop supply to thermal power plants over an estimated N3.3 trillion debt owed by generation companies ,GenCos.
Gas suppliers have warned of a possible halt in supply to thermal power plants over an estimated N3.3 trillion debt owed by power generation companies ,GenCos.
GenCos say the Federal Government owes them about N6.5 trillion, further straining the sector.
Any increase in gas prices could add pressure to electricity generation costs and overall power supply stability.
The new pricing regime is expected to have implications for power generation and industrial production, as stakeholders navigate rising costs alongside existing financial constraints in the energy sector.
This increase is expected to directly affect businesses, many of which may have little choice but to transfer the additional costs to end users.
“The new pricing reflects market conditions and regulatory provisions”, the authority stated, adding that the adjustment is necessary to ensure sustainable gas supply and attract investment into the sector.
But stakeholders argue that the timing of the increase could worsen existing economic hardship.
The Domestic Base Price sets the minimum rate at which gas can be sold within Nigeria, serving as a benchmark for pricing across the domestic market.
While the government maintains that such adjustments are essential to maintain investor confidence and ensure adequate supply, concerns remain about the immediate burden on consumers and small businesses.
Nigeria has in recent months implemented a series of economic reforms aimed at stabilising the economy and attracting investment.
However, these reforms have also led to higher costs in critical sectors, including fuel, electricity, and now gas.
For many households, the latest increase reinforces concerns that the benefits of reforms may take longer to materialise, while the pain is already being felt.
In October 2025, the Federal Government had concluded implementation frameworks for a N4 trillion government-backed bond aimed at settling verified arrears owed to power generation companies and gas suppliers.
The Federal Government plan to issue up to N4 trillion in government-backed bonds to settle legacy debts owed to Gencos and gas suppliers triggered concerns over its risky debt-for-debt strategy.
In December 2025, the federal government approved the settlement of N185 billion owed to natural gas producers.
