Nigeria’s government recently disclosed that the price of natural gas typically for power generation in the country has gone up. It was announced that the price increased from $2.18 per metric million British thermal units (MMBtu) to $2.42. This denotes that the price of electricity in the country could come up.
- The Nigerian government announces an increase from $2.18 to $2.42 per MMBtu of natural gas.
- Nigerian Electricity Regulatory Commission hints at the potential rise in tariffs following the gas price hike.
- With over 70% of electricity sourced from gas-fired plants, the price hike signals potential cost implications for Nigerian consumers.
A report by the Nigerian news publication, The Punch revealed that following a review of the new natural gas price, by the Nigerian Electricity Regulatory Commission, the price rise is likely to lead to an increase in electricity tariff payable by the Nigerian power consumers.
Currently, more than 70% of its electricity comes from gas-fired thermal power plants, in the West African country.
The revised domestic base price and wholesale rates of natural gas for 2024 were made public in an announcement on Monday by the regulatory body known as the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
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Additionally, the NMDPRA increased the price of commercial gas from $2.5mmbtu to $2.92mmbtu. Farouk Ahmed, the Chief Executive of NMDPRA, signed the statement.
The previous Multi-Year Tariff Order released in January 2024, for electricity companies was computed based on the former natural gas price.
This implies that the electricity tariff is highly likely to increase given the fact that natural gas is a primary component used in electricity generation in Nigeria.
Gas producers in the West African country have consistently demanded an increase in the product's price, citing both domestic and foreign oil and gas businesses, emphasizing that doing so would encourage them to increase output.
