FG halts cooking gas exports amid rising prices

• Published On: 23 October 2024 at 12:17

To prioritise domestic supplies, the federal government has suspended exports of locally generated liquefied petroleum gas, also known as cooking gas.

The legislation, which goes into effect on November 1, 2024, intends to curb Nigeria's growing petrol costs.

Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), confirmed the decision after a high-level meeting with key stakeholders in Abuja, according to The Punch.

According to a statement issued by the minister's spokesman, Louis Ibah, the discussion focused on solutions to alleviate the financial hardship caused by rising petrol prices for Nigerians.

It was previously stated that the price of cooking gas in Nigeria had risen from N700 per kilogramme in June 2023, when President Bola Tinubu assumed office, to N1,500 per kilogramme in October 2024, representing a 114% increase in 16 months.

To address the price increase, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, formed a high-level committee in November 2023.

The committee, directed by NMDPRA CEO Farouk Ahmed, includes major stakeholders from the LPG value chain and intends to explore solutions to reduce escalating costs.

Despite this effort to solve the issue, prices have remained volatile, recently rising to N1,500 from an average of N1,100 - N1,250/kg.

However, in a new directive targeted at lowering cooking gas prices, the Minister set both short-term and long-term aims.

He also 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 has asked the NMDPRA to consult with stakeholders and produce a thorough pricing system within 90 days.

This endeavour is part of a larger effort to stabilise cooking gas prices and improve market transparency.

The statement continued: "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."

As a long-term solution, the minister's statement announced plans to build facilities for blending, storing, and supplying LPG within a year.

This approach will halt exports until the domestic market reaches sufficiency and price stability.

The minister voiced serious worry over the continuous increase in cooking gas prices, emphasising the need for immediate action to safeguard consumers and maintain a stable supply.