The major purpose of economic instruments is to control pollution by harnessing the power of market incentives. Against this background, this paper examined and assessed the use of economic instruments for environmental sustainability in the Nigerian oil and gas sector. The political economy method was adopted to illuminate the issues surrounding the use of economic instruments in Nigeria. The study found that the use of economic instruments has not been effective in the Nigerian oil and gas sector. This was due mainly to inadequacies of economic instruments in use. The study thus recommended a combination of command – and – control tools and market based instruments to combat environmental problems in the oil and gas sector. Also, the government should muster sufficient will and determination to enforce the content of the Gas Flaring (Prevention of Waste Pollution) Regulation 2018.