Federal Government Raises Gas Price.

Federal Government says the new price of natural gas for power generation companies is now $2.42 per metric million British thermal unit, higher than the previous rate of $2.18mmbtu.

Nigerian generates over 70 per cent of its electricity from thermal power plants that are fired by gas, while, the rise in the cost of the commodity may lead to a hike in the tariff payable by power consumers once the Nigerian Electricity Regulatory Commission carries out another tariff review.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority, an agency of the Federal Government, unveiled the new domestic base price and wholesale prices of natural gas for 2024 and also pegged the cost of commercial gas at $2.92mmbtu, up from the previous cost of $2.5mmbtu. 

A statement signed by the Chief Executive, Farouk Ahmed said, the Multi-Year Tariff Order released by NERC in January 2024 for the electricity distribution companies was calculated based on the previous price of natural gas, and going by the latest cost of the commodity, there is a high tendency for an upward review of power tariffs, as gas is a major component used in power production, while, Gas producers including international and domestic oil and gas companies, have repeatedly called for the upward review in the price of the product, stressing that this would be an incentive to ramp up production.

The NMDPRA also said, 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.