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FG Announces New Gas Price For Electricity Generating Companies

FG Announces New Gas Price For Electricity Generating Companies
Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has announced new prices for natural gas used by power generation companies.

Gatekeepers News reports that the new domestic base price for natural gas is set at $2.42 per metric million British thermal units, up from the previous rate of $2.18mmbtu.

Additionally, the cost of commercial gas has been increased to $2.92mmbtu from $2.5mmbtu.

These adjustments are in line with the Petroleum Industry Act 2021, which provides a regulatory framework for determining market-based pricing for the domestic gas market.

The changes were mandated by section 167 of the act and the third and fourth schedules, which require the regulator to determine the Domestic Base Price and the marketable wholesale price of natural gas supplied to strategic sectors.

NMDPRA Chief Executive, NMDPRA, Farouk Ahmed who disclosed this, said: “The DBP at the marketable gas delivery point under Sector 167(1) and other provisions of the PIA shall be determined based on regulations which incorporate among such other matters, the following principles.

“(a) 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 producers.

“(b) 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.

“(c) Lowest cost of gas supply based on three-tier cost of supply framework. (d) Market-related prices tied to international benchmarks.”

The NMDPRA  also noted that it had set the “2024 Domestic Base Price at $2.42/MMBTU and wholesale prices for natural gas in strategic sectors, following consultations with stakeholders and in compliance with the PIA and Gas Pricing Regulations.”

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