In a bid to control the price of cooking gas and streamline gas industry operations, the Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), is implementing new regulations that will closely monitor and regulate gas terminals in Nigeria. These measures, outlined in the draft Midstream and Downstream Petroleum Operations Regulations 2024, mandate that natural gas or its derivatives cannot be exported or supplied locally without a valid wholesale gas supply license.
The new regulations, developed with stakeholder approval, aim to simplify the often-complex regulatory framework governing Nigeria’s petroleum sector. This comes after a significant spike in cooking gas prices, which jumped from N700/kg in June 2023 to N1,500/kg in October 2024. In response, the government has prioritized domestic gas supply over exports to help stabilize prices.
According to Mr. Ogbugo Ukoha, the Director of Distribution System Storage and Retailing Infrastructure, these new regulations will unify twelve previous guidelines and define specific fees and penalties for midstream and downstream petroleum activities.
The document also details oversight measures for gas terminals, stressing that no gas terminal can operate without an NMDPRA-issued license. It further states that imported petroleum products must undergo rigorous quality checks, including sampling and testing from certified labs, before discharge in Nigeria.
The rules apply strict requirements for gas processing facilities, blending plants, and import/export terminals, prohibiting any operations without proper authorization. Additionally, third-party storage and distribution facilities for petroleum liquids must have registered agreements with the Authority.
For petrol imports, the regulations require that all loading or unloading at bulk storage facilities is approved by the NMDPRA, and any export of petroleum products must be sourced from a Nigerian refinery or petrochemical plant.
A detailed list of 146 fines and penalties accompanies the new regulations to enforce compliance and ensure safe, sustainable operations. Fines range from $2 million for importing substandard petroleum products to $5 million per truck for unauthorized product evacuation. There are also penalties for unauthorized third-party blending, non-compliant contractor engagement, and unapproved facility use.
The NMDPRA’s strengthened regulatory framework is expected to improve operational safety, environmental protection, and consumer pricing stability within Nigeria’s gas and petroleum industry.
