Nigeria’s domestic gas market saw a notable 30 percent increase in sales between January 2022 and January 2025, according to a legal analysis by Tope Adebayo LP.
This growth was propelled by reforms under the Petroleum Industry Act (PIA) 2021 and recent executive orders issued by President Bola Tinubu.
In a statement, the Lagos-based law firm highlighted that the reforms have enhanced regulatory clarity, improved fiscal incentives, and boosted investor confidence across the gas value chain. However, challenges such as infrastructure deficits and implementation hurdles continue to temper the pace of progress.
Despite holding over 206 trillion cubic feet of proven gas reserves, Nigeria has long struggled to translate its vast resource base into a reliable domestic energy supply, hampered by underinvestment, inadequate infrastructure, and persistent gas flaring. Data cited in the report shows that domestic gas sales climbed from 49.3 billion standard cubic feet (bscf) in January 2022 to 64.2 bscf in January 2025, reflecting the positive impact of ongoing reforms.
The PIA is described as a watershed for the sector, representing the most comprehensive overhaul of Nigeria’s petroleum industry in decades. The act has established a stronger foundation for domestic gas development through clearer regulation, pricing liberalisation, infrastructure support, and improved investment incentives, as detailed in the report titled “From Policy to Practice: Legal and Regulatory Drivers of Nigeria’s Domestic Gas Market Under the PIA and Recent Executive Orders.”
Structural changes under the PIA, including the creation of separate regulatory agencies for upstream and midstream/downstream operations, have strengthened oversight and reduced regulatory bottlenecks. The report also highlights the Domestic Gas Delivery Obligation framework as a critical intervention, designed to boost supply to key sectors like power generation and industry, and backed by enforceable penalties for non-compliance.
Further improvements have been noted in gas utilisation and supply reliability, alongside modest reductions in gas flaring and expanded efforts under the Nigerian Gas Flare Commercialisation Programme, which has auctioned multiple flare sites for monetisation projects.
Beyond production reforms, the PIA has introduced open-access provisions for 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.
The report notes that recent executive orders and presidential directives have further strengthened the investment climate, introducing tax incentives, expediting contracting processes, and providing greater flexibility for local content requirements. According to Tope Adebayo LP, these initiatives reflect a deliberate governmental push to improve the economics of gas projects and enhance Nigeria’s attractiveness to investors.
Nevertheless, the firm cautions that policy measures alone are not sufficient to unlock the market’s full potential. Major obstacles remain, including persistent infrastructure deficits, payment risks in the power sector, legacy debts, and challenges in policy execution. While the shift from policy to practice is underway, it is not yet complete.
The analysis concludes that achieving a robust and scalable domestic gas market will require ongoing investment in pipelines, processing plants, transportation systems, and distribution networks, as well as stronger institutional coordination and regulatory consistency. The groundwork has been laid, the report notes, but sustained reforms and effective implementation are essential for Nigeria to realise the full benefits of its Decade of Gas initiative.
