Epileptic electricity to persist as Nigerian govt announces 11% increase in gas price

The Nigerian government has announced an increase in the wholesale price of gas to power plants by 11 per cent.

This means an increment to $2.42 per Million British Thermal Unit from $2.18 per MMBTU amid the persistent electricity supply in Nigeria.

In a notice issued by the Chief Executive of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Engr Farouk Ahmed, the government raised the commercial wholesale gas price from $2.50/MMBtu to $2.92/MMBtu.

“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”, the notice partly reads.

The implication is that the country’s electricity generation companies will have to pay more to buy gas.

Recall that the Minister of Power, Adebayo Adelabu, faulted the gas pricing in dollars in December last year.

Since January of this year, gas companies have reduced their supply to power plants following years of unpaid invoices amounting to over $1.2 billion.

The government intervened in March by paying $120 million to the companies as the power supply dwindled.

However, the country’s epileptic power supply had persisted.

Reacting to the Development, a stakeholder in the power sector, Adetayo Adegbemle, Executive Director and Convener, PowerUp Nigeria, said: “The federal government just used its hand to hike its (unpaid) ‘subsidy ticket’; it was already battling the impact of the FX floating policy and has now just decided to increase the price of gas.”