Nigeria’s domestic gas market recorded a 30 per cent increase in sales between January 2022 and January 2025, reflecting the impact of reforms introduced under the Petroleum Industry Act (PIA) 2021 and subsequent executive orders by President Bola Tinubu.
The finding is contained in a legal and regulatory analysis by Lagos-based law firm, Tope Adebayo LP, which said the reforms have improved investor confidence, enhanced regulatory certainty and made the country’s gas sector more attractive to investment.
According to the report, Nigeria’s domestic gas sales rose from 49.3 billion standard cubic feet (bscf) in January 2022 to 64.2 bscf in January 2025, representing a growth of about 30 per cent.
The report, titled “From Policy to Practice: Legal and Regulatory Drivers of Nigeria’s Domestic Gas Market Under the PIA and Recent Executive Orders”, described the PIA as the most far-reaching reform of the country’s petroleum sector in decades.
It noted that the legislation has created a stronger framework for domestic gas development by introducing clearer regulations, liberalising gas pricing, supporting infrastructure development and providing incentives for investors.
According to the firm, Nigeria possesses more than 206 trillion cubic feet of proven natural gas reserves but has struggled for years to translate that advantage into reliable domestic energy supply because of inadequate infrastructure, weak investment and persistent gas flaring.
The report stated that the establishment of separate regulatory agencies for upstream and midstream/downstream petroleum operations has improved oversight and reduced regulatory bottlenecks across the industry.
It also identified the Domestic Gas Delivery Obligation framework as a major policy tool aimed at ensuring adequate gas supply to strategic sectors such as electricity generation and manufacturing, with penalties in place for companies that fail to meet their obligations.
The analysis further pointed to improvements in gas utilisation, a gradual decline in gas flaring and progress under the Nigerian Gas Flare Commercialisation Programme, where several flare sites have been allocated for commercial development.
In addition, the report highlighted open-access provisions for gas infrastructure, the creation of the Midstream and Downstream Gas Infrastructure Fund and partial deregulation of gas pricing as measures designed to encourage investment in processing, transportation and distribution.
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It added that recent presidential directives have further strengthened the sector by introducing tax incentives, shortening project approval timelines and providing more flexible local content requirements.
Despite the progress, the law firm cautioned that significant challenges remain.
It identified inadequate infrastructure, payment risks in the power sector, outstanding legacy debts and implementation delays as major obstacles preventing the domestic gas market from reaching its full potential.
The report stressed that Nigeria would need sustained investment in pipelines, processing plants, transportation and distribution networks, backed by stronger regulatory coordination and consistent policy implementation, to fully realise the objectives of the Federal Government’s Decade of Gas initiative.
According to the analysis, while the reforms have laid a solid foundation for growth, translating policy into lasting results will depend on effective execution and continued market reforms.