In a decisive move to combat the rising cost of cooking gas, the Federal Government has announced a halt to the export of locally produced Liquefied Petroleum Gas (LPG) to prioritize domestic supply. The new policy, set to take effect on November 1, 2024, was disclosed by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, on Tuesday.
The announcement came following a high-level meeting in Abuja, convened by the minister to address the skyrocketing gas prices, which have placed immense hardship on Nigerians. The decision was made public through a statement by Ekpo’s spokesperson, Louis Ibah.
Over the past 16 months, the price of cooking gas in Nigeria has seen a sharp rise, increasing from N700 per kilogram in June 2023, when President Bola Tinubu took office, to N1,500 per kilogram by October 2024. This marks a staggering 114% price hike.
To tackle this persistent issue, the government previously established a committee in November 2023, led by Farouk Ahmed, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), to review the LPG value chain. Despite efforts to stabilize the market, prices have continued to surge.
As part of the new directive, the Nigerian National Petroleum Company Limited (NNPCL) and LPG producers are required to halt the export of LPG produced locally or import an equivalent volume at cost-reflective prices. This is aimed at ensuring that the local market has sufficient supply to drive down prices.
The minister also directed the NMDPRA to work with stakeholders to create a new domestic pricing framework within 90 days, with a focus on pricing LPG based on in-country production costs rather than international market rates. This is expected to reduce the burden on Nigerian consumers.
In a long-term strategy, the government plans to develop facilities within 12 months to blend, store, and distribute LPG, ensuring market sufficiency and price stability before considering any resumption of exports.
Minister Ekpo reiterated the government’s commitment to making cooking gas more affordable and accessible for Nigerians, as part of broader efforts to stabilize the energy sector.
