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The most telling number in Nigeria’s long-running gas debate is not the size of its reserves but the share of a legal obligation that actually gets delivered. In the first half of 2026, domestic gas supply averaged 2.05 billion cubic feet per day (Bcf/d), against an allocation of 3.16 Bcf/d under the Domestic Gas Delivery Obligation (DGDO), which works out to about 65 percent, according to the head of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Oritsemeyewa Eyesan. A Financial Vanguard report published on Monday uses figures like these to ask why 18 years of gas policies have not made home-grown gas a dependable supply for the people and businesses that need it.
The DGDO is the policy at the center of the story. Under the Petroleum Industry Act, gas producers must supply an allotted volume to the domestic market before they can export, and a legal summary notes that producers who feed export operations before meeting the obligation face sanctions from the regulator. A domestic gas aggregator, currently the Gas Aggregation Company Nigeria Limited, supports implementation by monitoring supply and demand for strategic sectors, namely power, commercial users and gas-based industries. On paper, the framework is clear. In practice, Eyesan said the figures show that simply widening the pool of companies with allocations does not guarantee that gas reaches users: 27 of about 63 producing companies hold DGDO allocations, and only 23 were actively supplying domestic customers.
The gap between obligation and delivery has a visible human cost, which is electricity. A THISDAY analysis of NUPRC data found that Nigeria exported an average of 45.8 percent of its utilised gas in January and February 2026, while the domestic share fell from 29.1 percent to 26.4 percent, even as power cuts spread. Thermal power plants account for more than 75 percent of installed generation capacity, so a drop in gas deliveries translates quickly into outages. The same analysis said the upstream sector had reached 77 percent of its DGDO as of July 2025, which means performance slipped by early 2026, though the periods and measures are not strictly comparable.
Why would producers sell abroad when the law says otherwise? Power Minister Adebayo Adelabu gave the answer, as relayed in the THISDAY report: exports are lucrative, the price of gas to the power sector is regulated at a low level, and the government and power companies owe producers money. The debts are not small. Legal commentary from Babalakin & Co said gas producers announced in the first quarter of 2026 that they would halt supply to thermal plants over an estimated ₦3.3 trillion owed by power generation companies, which led to blackouts in many parts of the country, echoing a similar episode in early 2024. The government began paying ₦185 billion in legacy obligations to gas producers through a royalty-offset arrangement in December 2025, according to an allAfrica report, meant to restore confidence. Debt of that size dwarfs the first payment, which shows how far the problem runs.
That is the commercial logic the Vanguard report identifies. Export contracts, often tied to liquefied natural gas, pay in dollars and pay on time. Domestic power buyers pay in naira at regulated prices, and not always promptly. When Ken Ife, a lead consultant at the ECOWAS Commission, cited payment challenges, pipeline vandalism, infrastructure deficiencies and inadequate investment as the main brakes on domestic supply, he was describing a market in which a rational seller can see why exporting feels safer. An anonymous industry expert quoted in the report summarized the legal point: an obligation to supply the local market cannot ensure physical delivery where gathering, processing, transport and payment systems fall short, and a weakness anywhere along the chain can mean shortages, higher prices and imports.
Cooking gas shows the same problem in a different form. NMDPRA data cited in the report indicate that Nigeria imported about 500,000 metric tons of liquefied petroleum gas (LPG) in 2021 and 800,000 in 2022. In 2023, imports reportedly accounted for about 47 percent of national consumption, with consumption near 1.36 million tons and imports around 639,000 tons, bringing estimated imports over the three years to about 1.94 million tons. For a country with more than 200 trillion cubic feet of proven gas reserves, depending on foreign supply for nearly half of the cooking gas used at home is a stark contradiction. Households feel it in the price, which follows international LPG costs and the exchange rate, not local production costs.
The proposed Gas Swap Framework is meant to help. Eyesan explained that it would let operators with stranded or hard-to-evacuate gas meet their obligation by partnering with operators that have the infrastructure to bring gas to market, which would make better use of existing assets and support gas-to-power delivery. Bassey Essien of the Nigerian Association of Liquefied Petroleum Gas Marketers said it could connect producers with gas but limited evacuation capacity to operators with infrastructure but insufficient supply. Experts quoted in the report caution that it is a logistical workaround and not a substitute for capital investment. In other words, it may help gas move through the pipes that exist, but it does nothing about the pipes that do not.
Essien also called for a broader domestic gas and LPG security strategy, one that would guarantee adequate supply for power, fertilizer production, critical industries and LPG while keeping exports competitive. That formulation points to the heart of the policy choice. Exports are not the enemy, since they bring in foreign exchange and fund investment. The task is to make domestic sales attractive enough, in price, payment security and reliability, that producers choose to supply them without being forced.
The stakes extend into the current political argument over fuel. The federal government’s 30-day petrol discount has been criticized by opposition parties as temporary, and the Lagos Chamber of Commerce and Industry has urged a faster rollout of compressed natural gas and electric vehicle options to cut transport costs. Those alternatives depend on a gas supply system that works. If gas does not reach filling stations and power plants at a dependable price, calls to switch to CNG remain slogans. Similarly, new export projects such as the proposed OgunLNG plant raise the question of how they will balance foreign sales with local supply, a point worth watching as plans develop.
For readers who want the underlying numbers, the regulator publishes production and delivery data on the NUPRC website, and Leadership’s report on the commission’s delivery figures is available in its coverage of the 2.05 Bcf/d result. Readers who follow Nigeria’s energy, economy and technology stories can find more coverage at BusinessTech Nigeria.
