Gas market grows 30% under PIA reforms

Nigeria’s domestic gas market recorded a nearly 30 per cent increase in sales between January 2022 and January 2025, driven by reforms introduced under the Petroleum Industry Act (PIA) 2021 and recent executive orders issued by President Bola Tinubu.

This was disclosed in a legal analysis by Lagos-based law firm, Tope Adebayo LP, which said the reforms had improved regulatory clarity, fiscal incentives and investor confidence across the gas value chain.

According to the report, domestic gas sales rose from 49.3 billion standard cubic feet (bscf) in January 2022 to 64.2bscf in January 2025, reflecting the gains recorded under the ongoing reforms.

The firm noted that despite holding more than 206 trillion cubic feet of proven gas reserves, Nigeria has historically struggled to translate its vast resources into domestic energy supply due to underinvestment, inadequate infrastructure and gas flaring.

It described the PIA as the most comprehensive reform of Nigeria’s petroleum sector in decades, saying the legislation has provided a stronger foundation for domestic gas development through regulatory certainty, pricing reforms, infrastructure support and enhanced investment incentives.

The report highlighted the establishment of separate regulatory authorities for upstream and midstream/downstream operations as a major step towards improving oversight and reducing regulatory bottlenecks.

It also identified the Domestic Gas Delivery Obligation framework as a key measure designed to boost gas supply to critical sectors, including power generation and industry, through enforceable compliance measures.

According to the analysis, improvements have also been recorded in gas utilisation and supply performance, alongside modest reductions in gas flaring and the expansion of the Nigerian Gas Flare Commercialisation Programme, which has seen several flare sites auctioned for monetisation projects.

The report further noted that the PIA introduced open-access provisions for gas infrastructure, partial liberalisation of gas pricing and the establishment of the Midstream and Downstream Gas Infrastructure Fund to support investments in processing, transportation and distribution.

It added that recent executive orders and presidential directives have further strengthened the investment climate through tax incentives, faster contracting timelines and more flexible local content requirements.

However, the law firm warned that policy reforms alone would not be sufficient to unlock the full potential of the domestic gas market.

It cited persistent infrastructure deficits, payment risks in the power sector, legacy debts and implementation challenges as major constraints slowing growth.

The report stressed that achieving a scalable and efficient domestic gas market would require sustained investment in pipelines, processing plants, transportation networks and distribution systems, as well as stronger institutional coordination and consistent implementation of reforms.

According to the analysis, while the foundation for growth has been established, Nigeria must bridge the gap between policy formulation and execution to fully realise the objectives of its Decade of Gas initiative.