The Federal Government has increased the price of gas to generate power from $2.18 Metric per Million British Thermal Units (MMBtu) to $2.42 MMBtu.
The Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Engr. Farouk Ahmed disclosed this in a notice released on Monday in Abuja.
The Editor Nigeria reports that the notice is titled: “Announcement of the Year 2024 Domestic Based Price (DBR) and Applicable Wholesale of Natural Gas for Strategic Sectors.”
Ahmed also said the government raised the commercial wholesale gas price from $2.42/MMBtu to $2.92/MMBtu.
He added that the adjustment in gas prices aligns with the Petroleum Industry Act, empowering regulatory authorities to set prices for the local market based on international benchmarks and cost considerations, ensuring adequate gas supply for domestic needs.
The NDMPRA boss said the Petroleum Industry Act of 2021, gave the Authority the powers to set domestic base prices for the local market.
“Accordingly, after due consultation with key stakeholders and taking into cognisance the provisions of the PIA, as well as the gazetted Gas Pricing and Domestic Demand Regulations, the NMDPRA hereby establishes the Year 2024 Domestic Base Price as USD 2.42 / MMBTU and wholesale prices of natural gas in the strategic sector,” it said.
It is understood that the increase would raise the cost of power generation as gas is a major fuel-for-power plant in the country as thermal power plants currently account for 80 per cent of the power generation.
Also, the increase will also raise the subsidy the federal government will now have to pay for electricity consumers unless they allow the market to charge a full cost-reflective tariff.
