Nigeria’s domestic gas market expanded by about 30% between January 2022 and January 2025, supported by reforms introduced under the Petroleum Industry Act (PIA) 2021 and recent executive orders issued by President Bola Tinubu, according to a legal analysis released by Tope Adebayo LP.
The Lagos-based law firm said the reforms have improved regulatory certainty, strengthened investor confidence and enhanced the fiscal attractiveness of the gas sector, although infrastructure deficits and implementation challenges continue to limit growth.
Nigeria holds more than 206 trillion cubic feet of proven natural gas reserves, among the largest in Africa. However, the country has historically struggled to translate those resources into reliable domestic energy supply due to underinvestment, inadequate infrastructure and persistent gas flaring.
According to data cited in the report, domestic gas sales increased from 49.3 billion standard cubic feet in January 2022 to 64.2 billion standard cubic feet in January 2025.
“The PIA represents the most comprehensive reform of Nigeria’s petroleum sector in decades and has established a stronger foundation for domestic gas development through regulatory clarity, pricing liberalisation mechanisms, infrastructure support and enhanced investment incentives,” the firm said 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 report said reforms introduced under the law, including the establishment of separate regulators for upstream and midstream/downstream operations, have improved oversight and reduced regulatory bottlenecks.
It also identified the Domestic Gas Delivery Obligation framework as a major policy tool designed to increase gas supply to critical sectors, including electricity generation and manufacturing. The framework includes penalties for producers that fail to meet supply commitments.
According to the analysis, gas utilization and supply performance have improved, while gas flaring has declined modestly. The report also noted progress under the Nigerian Gas Flare Commercialisation Programme, with several flare sites auctioned for commercial development projects.
The PIA introduced additional measures aimed at boosting investment, including open-access provisions for gas infrastructure, partial liberalization of gas pricing and the creation of the Midstream and Downstream Gas Infrastructure Fund to support investments in processing, transportation and distribution networks.
The report said recent executive orders and presidential directives have further strengthened the investment climate through tax incentives, accelerated contracting processes and more flexible local content requirements.
“These interventions signal a deliberate effort by the government to improve project economics and enhance Nigeria’s competitiveness as a destination for gas investments,” the firm said.
Despite the progress, the report warned that significant obstacles remain.
“Large-scale outcomes remain constrained by persistent infrastructure gaps, payment risks within the power sector, legacy debts, and implementation inefficiencies. The transition from policy to practice is clearly underway, but it remains incomplete,” it stated.
The analysis said achieving a fully functional and scalable domestic gas market will require sustained investment in pipelines, processing plants, transportation systems and distribution infrastructure, as well as stronger institutional coordination and consistent regulatory enforcement.
The report concluded that while the foundation for growth has been established, the long-term success of Nigeria’s gas sector will depend on effective implementation and continued reforms aimed at bridging the gap between policy objectives and operational realities.
