The Federal Government has announced a suspension of exports of locally produced Liquefied Petroleum Gas, commonly known as cooking gas, to prioritize domestic supply.
The measure, set to take effect on November 1, 2024, aims to address the escalating gas prices in Nigeria.
Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, confirmed the decision following a high-level meeting in Abuja with key stakeholders, according to The Punch.
According to a statement from the minister’s spokesman, Louis Ibah, the meeting focused on strategies to alleviate the financial strain caused by soaring gas prices for Nigerians.
It was earlier reported that the price of cooking gas in Nigeria has surged from N700 per kilogram in June 2023, when President Bola Tinubu took office, to N1,500 per kilogram in October 2024, reflecting a 114% increase over 16 months.
To address this price hike, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, established a high-level committee in November 2023.
The committee, led by the Chief Executive of the NMDPRA, Mr Farouk Ahmed
includes key stakeholders from the LPG value chain and aims to develop solutions to mitigate the rising costs.
However, despite this effort to address the issue, prices have continued to fluctuate, recently soaring to N1,500 from an average of N1,100 – N1,250/kg.
But in a new directive aimed at reducing cooking gas prices, the Minister outlined both short-term and long-term targets.
He said, “With effect from November 1, 2024, NNPCL and LPG producers are to stop exporting LPG produced in-country or import equivalent volumes of LPG exported at cost-reflective prices.”
In terms of the pricing framework, he has directed the NMDPRA to engage with stakeholders to develop a comprehensive pricing framework within 90 days.
This initiative is part of the broader strategy to stabilize cooking gas prices and enhance market transparency.
The statement added, “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.”
As a long-term solution, the minister’s statement outlined plans to develop facilities for blending, storing, and delivering LPG within 12 months.
This measure will suspend exports until the domestic market achieves sufficiency and price stability.
The minister expressed significant concern regarding the ongoing increase in cooking gas prices, emphasizing the need for urgent action to protect consumers and ensure a stable supply.
