The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has clarified that there are no subsidies in the oil and gas sector, citing the country’s fully deregulated market. According to George Ene-Ita, Director of the Public Affairs Department at NMDPRA, the recent price increase of Compressed Natural Gas (CNG) is a result of market forces, not government intervention.
The price of CNG at refilling stations in the Federal Capital Territory (FCT) rose from N230 to N380 per Standard Cubic Metre (SCM) earlier this week, prompting long queues. This increase may be attributed to the scarcity of the product due to inadequate infrastructure. The NMDPRA spokesperson emphasized that the Petroleum Industry Act (PIA) dictates a baseline price for gas resources, including CNG, and as long as market prices conform to this baseline, they are considered legitimate.
The Presidential Initiative on Compressed Natural Gas (P-CNGI) also weighed in on the matter, stating that no directive or policy has been issued by the Federal Government to alter CNG pump prices. The recent price adjustments, according to P-CNGI, were made by private-sector operators and do not reflect any government directive or policy. The initiative’s primary goal, as directed by President Bola Tinubu, is to promote the development of the CNG mobility market and encourage the adoption of a cleaner, more sustainable alternative fuel to diesel nationwide.
The NMDPRA’s clarification and the P-CNGI’s statement aim to provide transparency and reassurance to consumers amidst the price increase. As Nigeria continues to navigate its energy landscape, the deregulated market is expected to respond to supply and demand dynamics. The focus on CNG as a viable alternative fuel source is part of the country’s efforts to diversify its energy mix and reduce reliance on traditional fuels. With the government’s initiatives in place, the next steps will likely involve monitoring the market’s response to the price adjustments and addressing any infrastructure challenges to ensure a stable supply of CNG.
