In a bid to address the skyrocketing prices of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, the Federal Government has placed an immediate ban on the export of LPG produced in Nigeria.
The decision comes as the price of the commodity continues to rise sharply, affecting millions of households across the country.
Rt. Hon. Ekperikpe Ekpo, the Minister of State for Petroleum Resources (Gas), raised concerns over the escalating costs of LPG in a statement released by his media aide. According to the statement, the price of LPG has surged from an average of N1,100 to N1,250 per kilogram to a staggering N1,525 per kilogram, despite the government’s efforts to stabilize prices.
Ekpo revealed that a high-level committee had been established in November 2023, led by Mr. Farouk Ahmed, the Authority Chief Executive of the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA). Despite the committee’s efforts, prices have remained on the rise.
“The continued rise in LPG prices is a significant burden on Nigerians, and we are taking immediate actions to curb this trend,” Ekpo noted in his statement. He convened a meeting with key stakeholders in the LPG value chain to urgently tackle the challenges.
As part of the short-term solution, the Minister announced that effective November 1, 2024, the Nigerian National Petroleum Company Limited (NNPCL) and other LPG producers are required to cease the export of cooking gas produced within the country. Should they choose to continue exports, they must import an equivalent volume of LPG at cost-reflective prices, a move designed to maintain a balance between local supply and demand.
Further steps to address the issue include the creation of a new domestic pricing framework within 90 days. The NMDPRA, in collaboration with stakeholders, will index the new pricing structure to the cost of in-country production rather than relying on external market prices from the Americas and Far East Asia, which have driven local costs upward.
The government also outlined a long-term plan to resolve the LPG crisis. Over the next 12 months, infrastructure for blending, storing, and distributing LPG will be developed to boost domestic supply. The ultimate goal is to ensure that LPG exports remain halted until local production can meet the needs of Nigerians and prices stabilize.
“These measures are being implemented to improve the availability of cooking gas, ensure its affordability, and protect Nigerians from the economic strain caused by rising LPG prices,” Ekpo emphasized.
