🍞Gas economics

Hello!

Adetomiwa here 👋🏽. How was your weekend?

Quite a bit happened in the last few days of last week, and a lot of it was about energy. In this edition, we discuss government reshuffles, NNPC’s grand gas announcement, Nigeria’s latest airport launch and more!

Let’s get into it.

After years of engineering drama, NNPC Gas Infrastructure Company, a subsidiary of NNPC Ltd, says it has completed the River Niger crossing on the River Niger Crossing of the 130-kilometre Obiafu-Obrikom-Oben (OB3) Gas Pipeline. gas pipeline—the part that had been holding everything up for years. OB3 is meant to carry up to 2 billion standard cubic feet of gas per day, so finishing this section basically means the system can finally start behaving like a connected network instead of disconnected gas islands.

So, Nigeria could have a seamless gas passage. What does that mean?

Right now, Nigeria doesn’t really have a “gas shortage” problem in the simple sense. It has a moving gas problem. Nigeria has gas, but the issue has been getting it from where it’s produced to where it’s needed: power plants, factories, and industrial users. That’s what OB3 is supposed to fix.

With the River Niger crossing done, Nigeria is closer to building a fully integrated gas grid where gas can flow between the eastern and western parts of the country without getting stuck in logistical limbo.

What does that change in real life?

NNPC says the project could unlock over 500 million standard cubic feet of extra gas supply in the near term. More gas could lead to more gas for electricity generation, fewer supply issues for industries, and a more connected national gas system (finally behaving like a system).

The big picture

Nigeria seems to be slowly (but surely) fixing its struggling energy system. OB3 links the eastern and western gas networks, which sounds simple until you realise the country has spent years trying to make that sentence a reality.

Bottom line

Gas has long been part of the conversation around Nigeria’s power and manufacturing challenges. With OB3 now connecting more parts of the country’s gas network, the real question shifts to how much of that gas can actually make it to power plants and industries, and how quickly that starts to show up in output.

✈️ Africans be flyin’: Even with all the jet fuel instability lately, March data suggest there’s no better time to be an African airline owner. According to the International Air Transport Association, international passenger demand jumped 19.2% year-on-year, while planes got noticeably fuller because more people are flying. The kicker is that this happened while global traffic slowed down a bit, thanks to disruptions elsewhere. Closer to home, Nigeria is also getting in on the momentum. While domestic flights are still struggling, Victor Attah International Airport in Akwa Ibom State just launched its first international flight to Kotoka International Airport, officially putting Uyo on the regional travel map.

🤝 Nigeria’s oil regulator reshuffle: President Bola Tinubu has nominated Rabiu Abdullahi Umar to head the Nigerian Midstream and Downstream Petroleum Regulatory Authority. This is the second reshuffle in just four months, following earlier exits tied to tensions involving Aliko Dangote and regulatory disputes. The timing isn’t random. It comes as Nigeria is dealing with rising domestic energy prices and a more volatile global oil market, so the regulator’s next phase will be focused on stabilising a sector that’s already under pressure.

💸 Economy vs (some) business reality: Even in this economy, some companies are moving differently. BUA Cement Plc and Presco Plc topped the profitability charts in Q1 2026, with margins near 50%, as firms leaned hard on price increases and efficiency to stay ahead of inflation and FX pressure. Overall, 17 major non-financial firms grew profits by 75% year-on-year, with MTN Nigeria and Dangote Cement Plc leading in absolute profit. But it’s not a universal growth. While telecoms, cement, and some food producers have been able to pass costs to consumers, others, especially in consumer goods, are still feeling the squeeze from weaker purchasing power.

Palm oil prices are doing the opposite of what early 2026 forecasts promised. Instead of easing, they’ve climbed to around $1,135–$1,160 per ton, driven largely by supply issues in Indonesia. Between a tough dry season, higher fertiliser costs, and policies pushing more palm oil into biodiesel (like Indonesia’s B50 plan), less supply is making it to the export market, so prices are staying high.

There’s also a new twist: palm oil is now moving more in sync with crude oil. As oil prices rise, biodiesel becomes more attractive, which pulls more palm oil away from food markets and into energy use. Add in export taxes from Indonesia, and importing countries like Nigeria end up paying even more.

And Nigeria really feels it. The country produces about 1.4 million tons annually but needs over 2.5 million, leaving a massive gap that gets filled with imports costing roughly $500–$600 million each year. That gap shows up directly in food prices, since palm oil is a staple input across households and food production.

Until domestic production scales meaningfully, Nigeria remains exposed. So when global prices move, local prices tend to follow.

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