The Federal Government has ordered a halt to the export of locally produced Liquefied Petroleum Gas, commonly known as cooking gas effective November 1, 2024 This decision aims to prioritize domestic supply and lower prices nationwide. The measure was implemented in response to the escalating prices and the associated challenges faced by Nigerians.
This directive was disclosed by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo and the decision was made public through a statement issued by Louis Ibah, the Minister’s spokesman.
According to the Minister’s spokesperson, Louis Ibah, the decision was made following a high-level meeting convened by the minister in Abuja with key stakeholders. This meeting aimed to address the soaring prices of Liquefied Petroleum Gas (LPG) and the resulting hardships faced by Nigerians. The new measures are designed to improve availability and affordability, providing relief to citizens affected by the rising costs of LPG.
Recent data reveals that the price of cooking gas surged from N700 per kilogram in June 2023, around the time President Bola Tinubu took office, to N1,500 per kilogram in October 2024. This marks an increase of approximately 114 percent over 16 months.
In response to the escalating prices, the minister formed a high-level committee in November 2023, led by Mr. Farouk Ahmed, Chief Executive of the NMDPRA, comprising key stakeholders from the LPG value chain to explore sustainable solutions. However, despite these efforts, prices have continued to fluctuate, recently spiking to N1,500 from an average of N1,100 to N1,250 per kilogram. In light of these persistent challenges, the government has decided to take more decisive action by halting LPG exports
In a new directive, the minister gave short-term and long-term targets to reduce the price. He stated, “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 directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority to meet with stakeholders to derive the pricing framework within 90 days.
The statement further outlined that the “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.”
To provide a long-term solution, the statement also indicated that within 12 months, facilities will be developed to blend, store, and deliver LPG, ending exports until the market achieves sufficiency and price stability. Additionally, the minister expressed deep concern regarding the ongoing rise in the price of Liquefied Petroleum Gas, commonly referred to as cooking gas, in the country.
The new export ban represents a significant move to tackle the underlying challenges and ensure that Nigerians have access to affordable cooking gas.
