The Federal Government has announced a halt on the export of Liquefied Petroleum Gas (LPG), also known as cooking gas, produced locally in Nigeria. This decision, aimed at curbing the rising cost of LPG, will take effect from November 1, 2024.
Ekperikpe Ekpo, the Minister of State for Petroleum Resources (Gas), explained the measure during a meeting with stakeholders in Abuja, called to address the continuous increase in LPG prices and its impact on Nigerians. Ekpo 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.”
The announcement was contained in a statement by Louis Iba, the Minister’s spokesperson. As part of the pricing reform, Ekpo directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to work with stakeholders to create a domestic LPG pricing framework within 90 days. This framework will index the price of LPG to the cost of in-country production, as opposed to the current practice of benchmarking against external markets like the Americas and Far East Asia, which has driven up the cost of the commodity for Nigerians.
“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,” the statement read. The new pricing approach is expected to ease the burden on Nigerians, who currently pay significantly higher prices for cooking gas, despite the country’s natural endowment in LPG production.
For a long-term solution, the statement added that the government plans to develop facilities within 12 months to blend, store, and distribute LPG domestically, halting exports until the market achieves sufficiency and price stability.
Expressing concern over the hardship caused by rising LPG prices, Ekpo had previously set up a high-level committee in November 2023, led by the NMDPRA’s Chief Executive, Mr. Farouk Ahmed, to tackle the issue. However, despite these efforts, LPG prices have continued to fluctuate, recently soaring to N1,500 per kilogram from an average of N1,100–N1,250.
Ekpo’s directives signal the government’s commitment to addressing the challenges in the LPG market and ensuring that Nigerians have access to affordable cooking gas.
