conference paper · SPE Nigeria Annual International Conference and Exhibition
Nigeria operates a domestic gas pricing framework featuring differentiated pricing regimes across sectors, including floor prices for strategic areas such as power generation, industry, and commercial use. An evaluation of this system examines its operational workability, weighing its advantages and disadvantages while identifying strategic solutions to improve efficiency and support broader energy and economic objectives. The assessment combines analyses of regulatory policy documents and publicly available tariff data with comparative case studies of pricing models in India, Egypt, and Indonesia. Drawing across these sources, the evaluation pinpoints major implementation hurdles and market distortions generated by the current framework, while outlining practical avenues for regulatory reform.
Domestic gas pricing directly affects electricity generation, industrial manufacturing, and broader economic activity. When regulated pricing creates market distortions or implementation bottlenecks, energy supply and economic growth suffer. Evaluating sector-specific floor prices against international benchmarks helps policymakers, energy producers, and industrial consumers understand how to design more functional pricing structures that support domestic power generation and industrial competitiveness.
This work provides advisory insights and comparative benchmarks that can be used by energy regulators, government ministries, and commercial gas market operators. While it does not introduce a commercial product or technical invention, the proposed reform solutions can inform policy design, tariff setting, and gas supply contract negotiations. Being an analytical policy evaluation, it is primarily ready for use in regulatory consultations and market reform dialogues.
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Abstract Nigeria's domestic gas pricing framework establishes differentiated pricing regimes for various demand sectors, notably instituting a floor price for strategic sectors such as power generation, commercial, and industrial use. This paper critically evaluates the framework's workability, assesses its merits and demerits, and proffers strategic solutions to enhance its efficiency and alignment with national energy and economic goals. The methodological framework involved literature review, policy documents analysis, analysis of publicly available tariff data, and comparative mutiple case study of India, Egypt and Indonesia. Drawing on regulatory documents, sectoral data, and comparative pricing models, the paper highlights key implementation challenges, market distortions, and opportunities for reform.
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DOI: 10.2118/235001-ms
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