The Domestic Base Price (DBP) of natural gas for heating has risen by half a dollar (50 cents) for cement, non-grid electricity generation, aluminium, iron and steel industries, among others in line with the Petroleum Industry Act (PIA) 2021.
This is according to a statement by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Sunday.
In July this year, the Minister of State Petroleum Resources, Chief Timipre Sylva, at stakeholders’ forum on gas in Kano announced a slash in the domestic price of natural gas by $0.32, from $2.50 to $2.18 per standard cubic feet (scuf).
However, NMDPRA said the new DBP has an additional $0.50 cost for commercial sectors other than grid- electricity generation.
The Chief Executive Officer (CEO) of NMDPRA, Engr Farouk Ahmed, said the applicable Wholesale Gas Price (WGP) for the power sector shall be the established Domestic Gas Price which the minister said is at $2.18 (without transport cost), “the NMDPRA helmsman highlighted that the other commercial sector consisting of cement, non-grid power, iron and steel industries, aluminium and all such industries requiring gas for heating shall be DBP +US $0.50.”
This means that these other commercial sectors will buy the natural gas in the domestic market at $2.68 cents per scuf.
NMDPRA said the PIA was assented to by the President on the 16th of August 2021 and gazetted on the 27th of August 2021, and that it empowers the Authority to “determine the DBP, three months following the effective date of the Act.”
Ahmed also noted that the DBP will be determined annually based on the criteria like prices of gas in countries with huge gas reserves among other international benchmarks.
He said the Authority will engage stakeholders before the final declaration of the 2022 DBP and wholesale price of gas to the strategic sectors. (Daily Trust)