The federal government has prohibited the export of domestically generated Liquefied Petroleum Gas (LPG), often known as cooking gas, beginning November 1, 2024.
Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), declared that home supply will be prioritised to reduce the rising cost of LPG for Nigerian households.
The decision was announced by the Minister’s spokesperson, Louis Ibah, following a high-level meeting in Abuja between government officials and major players in the LPG business.
In July 2023, the average price of refilling a 12.5kg cooking gas cylinder was 9,162.11, but by July 2024, it had risen to 14,261.57.
Gas prices have been volatile despite several government initiatives; according to the most recent figures, they have increased to 1,500 per kilogramme, up from 1,100 to 1,250 per kilogramme earlier this year.
A high-level committee headed by Farouk Ahmed, the CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), was called by the Minister in November 2023 in reaction to the ongoing price increases.
The group was charged with identifying long-term fixes to keep the LPG market stable. However, the government decided to take a more extreme measure by stopping LPG exports as prices continued to rise.
The Nigerian National Petroleum Company Limited (NNPCL) and all other LPG manufacturers are required under Ekpo’s direction to stop exporting cooking gas by November 1, 2024.
The directive mandates that producers import a comparable quantity of gas at rates that represent the market if any exports occur.
“Producers will either import comparable volumes at prices reflecting market realities or cease exporting LPG as of November 1, 2024, to stabilise prices,” Ekpo said.
Additionally, the government directed the NMDPRA to create a new domestic pricing system over the following ninety days in collaboration with industry partners.
In contrast to the existing paradigm, which indexes pricing against global markets like those in Asia and the Americas, the framework will be based on local manufacturing costs.
Even though cooking gas is produced locally, Nigerians are compelled to pay exorbitant prices due to the reliance on global pricing.
In the long term, the government intends to construct storage, blending, and distribution facilities during the next year. The export embargo would be in force until Nigeria has achieved market sufficiency and stable, reasonable LPG pricing.
“The government remains deeply concerned about the rising cost of cooking gas and is committed to ensuring Nigerians have access to this essential commodity at affordable prices,” according to the released statement.
