The Federal Government has issued Nigeria’s first Gas Trading Licence, a move officials say will finally dismantle opaque pricing structures and open the domestic gas market to real competition.
The licence, granted to JEX Markets Limited by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, also authorises a Clearing House and Settlement system — a financial infrastructure meant to guarantee payments and standardise trades between gas buyers and sellers.
The announcement was made in Abuja, where government officials, regulators, industry leaders and investors gathered to outline how the new system will reshape an underperforming gas market.
Okay News reports that Nigeria holds over 209 trillion cubic feet of proven gas, yet still struggles with unreliable supply, contract failures, and high transaction costs.
Officials said the new system addresses long-standing complaints from power producers, industrial manufacturers, and transport operators who rely on gas but face unpredictable prices, delayed deliveries and weak contract enforcement.
NMDPRA’s Chief Executive, Farouk Ahmed, said the licence signals “the beginning of a transparent, technology-enabled marketplace.” He said the JEX platform will introduce real-time trading, transparent price discovery, automated settlement, and improved liquidity — all core features of a modern commodities market.
He stressed that the authority will enforce strict participation rules to ensure only credible buyers and sellers operate in the system. Ahmed added that the goal is to restore investor confidence after years of pricing opacity and gas supply disruptions that slowed industrial expansion and limited gas-to-power output.
Also speaking, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, said the framework supports the administration’s drive to make gas the backbone of Nigeria’s industrial growth. He listed three expected changes: controlled access to credible players, dependable contract performance, and more affordable gas driven by competitive pricing.
Ekpo said these reforms align with the Decade of Gas and the Presidential CNG Initiative, which aim to grow gas use in power generation, industries, vehicles, and economic diversification.
The Securities and Exchange Commission’s Director-General, Emomotimi Agama, called the clearing house “the most critical layer” of the new system, arguing that gas would now function not only as a commodity but as a financial asset capable of attracting new investment instruments, hedging products, and structured funds.
From the security side, the Office of the National Security Adviser announced that ongoing pipeline protection efforts — including joint military operations against theft, illegal refining, and vandalism — will be expanded to safeguard the infrastructure supporting the new trading environment.
Nigeria’s gas market has endured decades of scarcity, irregular supply, and unstable pricing. Previous reforms made progress but failed to fully eliminate non-transparent pricing, payment disputes, and supply disruptions to power plants.
Under the new regime, gas contracts will be standardised, prices publicly reported, and settlement guaranteed. Off-takers will have multiple suppliers, while investors in pipelines and storage will benefit from clearer market signals.
Officials say the objective is simple: turn Nigeria’s vast gas deposits into a functioning, competitive, liquid market that supports power stability, industrial growth, and new investment.
