By Monsurat Abisoye
Nigeria’s domestic gas market expanded significantly between January 2022 and January 2025, with gas sales increasing by about 30 per cent, driven by reforms introduced under the Petroleum Industry Act (PIA) 2021 and recent executive orders signed by President Bola Tinubu.
This was contained in a legal analysis by Lagos-based full-service law firm, Tope Adebayo LP, which noted that the reforms had improved regulatory certainty, enhanced the sector’s fiscal appeal, and strengthened investor confidence across the gas value chain. However, it cautioned that infrastructure deficits and implementation challenges continue to hinder faster growth.
According to the report, Nigeria possesses more than 206 trillion cubic feet of proven gas reserves. Still, it has historically struggled to translate this abundance into an adequate domestic energy supply due to underinvestment, poor infrastructure, and persistent gas flaring.
Data cited in the analysis showed that domestic gas sales increased from 49.3 billion standard cubic feet (bscf) in January 2022 to 64.2bscf by January 2025, reflecting the positive impact of reforms introduced under the PIA.
In its report, titled From Policy to Practice: Legal and Regulatory Drivers of Nigeria’s Domestic Gas Market Under the PIA and Recent Executive Orders, the firm described the legislation as the most comprehensive overhaul of Nigeria’s petroleum sector in decades.
It stated that the PIA had created a stronger framework for domestic gas development through clearer regulations, pricing liberalisation measures, infrastructure support, and enhanced incentives for investors.
The report explained that structural reforms under the Act, including the establishment of separate regulatory bodies for upstream and midstream/downstream operations, had improved oversight and reduced regulatory bottlenecks.
It also identified the Domestic Gas Delivery Obligation framework as a major policy intervention designed to increase gas supply to critical sectors such as electricity generation and industry, noting that the framework includes penalties for operators who fail to comply.
According to the analysis, there have also been improvements in gas utilisation and supply performance, alongside modest reductions in gas flaring. It added that the Nigerian Gas Flare Commercialisation Programme had expanded, with several flare sites auctioned for monetisation projects.
Beyond production initiatives, the PIA introduced open-access provisions for gas infrastructure, partially liberalised gas pricing and established the Midstream and Downstream Gas Infrastructure Fund to encourage investment in processing, transportation, and distribution facilities.
Tope Adebayo LP further noted that recent executive orders and presidential directives had strengthened the investment environment through tax incentives, shorter contracting timelines, and more flexible local content requirements.
The firm said these measures demonstrate the government’s commitment to improving project viability and positioning Nigeria as a more attractive destination for gas investments.
Despite the progress recorded, the report warned that policy reforms alone would not unlock the sector’s full potential. It pointed to persistent infrastructure gaps, payment challenges within the power sector, legacy debts, and implementation inefficiencies as major obstacles to large-scale growth.
According to the analysis, building a fully functional and scalable domestic gas market will require sustained investment in pipelines, processing plants, transportation networks, and distribution systems, as well as stronger institutional coordination and consistent regulatory enforcement.
The report concluded that while important foundations have been established, the long-term success of Nigeria’s domestic gas market will depend on effective implementation and continued reforms. It stressed that bridging the gap between policy design and practical execution remains essential to achieving the objectives of the Federal Government’s Decade of Gas initiative.