The export of domestically generated cooking gas, or liquefied petroleum gas, was prohibited by the federal government yesterday due to the ongoing price increases.
This decision comes after months of speculation and debate surrounding the rising costs of cooking gas in the country. Many households have been struggling to afford this essential resource, leading to widespread concerns about food security and energy access. The government’s move to restrict exports is seen as a necessary step to prioritize the needs of its own citizens and address the growing economic challenges facing the nation.
The ongoing rise in LPG prices has deeply alarmed Rt. Hon. Ekperikpe Ekpo, Minister of State Petroleum Resources (Gas), according to a statement released by his media assistant.
In November 2023, the Minister formed a high-level committee with important players in the LPG value chain, headed by Mr. Farouk Ahmed, the Authority Chief Executive of the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA), in an attempt to address the skyrocketing cost of cooking gas.
Prices have continued to fluctuate despite these efforts to solve the issue, most recently rising to N1,525 per kilogram from an average of N1,100 to N1,250.
According to the statement, Ekpo called a meeting with interested parties to discuss the soaring costs and the resulting hardships faced by Nigerians.
The Gas Minister has issued the following directives in order to fight this: Short-Term Solution: NNPCL and LPG producers must either import similar volumes of LPG shipped at cost-reflective prices or cease exporting LPG produced domestically as of November 1, 2024.
“Pricing Framework: Within ninety days, NMDPRA will work with stakeholders to develop a domestic LPG pricing framework that will index prices to the cost of domestic production. This will replace the current practice of indexing prices against external markets, like those in the Americas and Far East Asia, even though the commodity is produced domestically and Nigerians must pay a significantly higher price for a naturally occurring commodity.
Long-Term Solution: Facilities for blending, storing, and delivering LPG will be built within a year, halting exports until the market reaches price stability and sufficiency.
In order to solve the underlying issues and guarantee that Nigerians have access to reasonably priced cooking gas, Ekpo issued these recommendations.
In order to shield Nigerians from the financial hardship brought on by the increase in LPG prices, the Minister stated, the new measures are intended to increase availability and guarantee affordability.
Additionally, Ekpo emphasized the importance of regulating the LPG market to prevent future price spikes. By implementing these measures, the government aims to ensure a stable supply of cooking gas for Nigerian households at reasonable prices.
