The Department of Petroleum Resources, (DPR), on Monday, says pricing in the gas sector should be market-based.
It said this is to guarantee upstream gas producers of fair and equitable returns for their investments.
In a statement issued in Abuja, Director, DPR, Engr Sarki Auwalu, said the price however should be such that end-users are able to pay for gas offtake in a reliable and consistent manner.
Auwalu, who spoke at the Pre-Summit Conference of the Nigerian International Petroleum Summit (NIPS), on the principal theme: ‘The Decade of Gas – Towards a Gas-Powered Economy’ in Abuja, said there was a need to ensure that the commodity is rightly priced to ensure the security of gas supply and security of credible gas demand.
He 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.
The Director noted that 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.
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