The Department of Petroleum Resources (DPR) said on Monday market forces would be allowed to determine the gas price in order to guarantee the supply and demand of the commodity.
The DPR Chief Executive, Sarki Auwalu, disclosed this while presenting a keynote address at the pre-summit conference on “Decade of gas,” held in Abuja.
Auwalu said market-based pricing of gas was critical as it would assure producers of returns on their investments.
He also outlined five critical levers for gas development, especially as Nigeria moves to leverage its abundant gas resources for national growth, diversification of the economy and economic transformation.
The levers, according to him, include availability, accessibility, affordability, and acceptability, as well as deliverability.
He noted that these are critical for the utilization of Nigeria’s proven gas reserves of 203 trillion cubic feet for national development.
Auwalu said: “Whereas references have been made to the other elements in this discussion, right pricing of gas is requiring particular attention to ensure the security of gas supply and security of credible gas demand.
“This is because upstream gas producers must be assured that they will receive fair and equitable returns for their investments whereas, the price must be such that the end-users are able to pay for gas offtake in a reliable and consistent manner.
“Accordingly, the most robust and sustainable pricing mechanism is that which ‘let the market speak’ in a way that all costs are reflective of prevailing market conditions and for which the economic dynamics of demand and supply are allowed to interplay in an open, transparent, and free-market environment.
“Thus, our drive as a nation should be early attainment to the ‘willing buyer; willing seller’s market status.