The Federal Government has announced a halt on the export of locally produced Liquefied Petroleum Gas, commonly referred to as cooking gas, to prioritize domestic supply.
This significant policy change, aimed at addressing the rising cost of gas in Nigeria, will take effect on November 1, 2024.
The PUNCH reported that the announcement was made by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, during a press briefing in Abuja on Tuesday.
The minister’s spokesman, Louis Ibah, mentioned that the decision emerged from a high-level meeting convened by Ekpo with key stakeholders to discuss the alarming increase in gas prices and its impact on everyday Nigerians.
Reports indicated that the price of cooking gas has surged dramatically, rising from approximately N700 per kilogram in June 2023, when President Bola Tinubu took office, to a staggering N1,500 per kilogram by October 2024.
This marks an increase of about 114 percent over just 16 months.
In a bid to address these soaring prices, the minister had previously established a high-level committee in November 2023, led by Mr. Farouk Ahmed, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
This committee included key stakeholders from the LPG value chain; however, despite their efforts, prices have continued to fluctuate, with the most recent rise bringing the average price up from N1,100–N1,250/kg to N1,500/kg.
In a decisive move to combat the issue, the minister has mandated that starting November 1, 2024, the Nigerian National Petroleum Company Limited and LPG producers must cease the export of domestically produced LPG or import equivalent volumes of LPG that they previously exported at cost-reflective prices.
Furthermore, Ekpo outlined both short-term and long-term objectives for managing gas pricing.
He directed the NMDPRA to collaborate with stakeholders to create a domestic LPG pricing framework within 90 days.
This new pricing structure will be based on the cost of local production rather than the current practice of linking prices to international markets, such as those in the Americas and Far East Asia.
“Pricing Framework: NMDPRA will engage stakeholders to create a domestic LPG pricing framework within 90 days, indexing price to cost of in-country production, rather than the current practice of indexing against external markets, such as the Americas and Far East Asia, whereas the commodity is produced in-country and the Nigerian people are required to pay much higher price for an essential commodity the country is naturally endowed with,” he stated.
In addition to these immediate measures, the government plans to establish facilities for blending, storing, and delivering LPG over the next 12 months.
This initiative aims to phase out exports until the domestic market reaches a level of sufficiency and price stability.
Expressing deep concern over the persistent rise in LPG prices, Minister Ekpo’s directives are a proactive step towards tackling the challenges within the sector and ensuring that Nigerians have access to affordable cooking gas in their homes.
