The Federal Government (FG) has banned export of locally produced Liquefied Petroleum Gas (LPG) also known as cooking gas, with a view to ensuring enough domestic supply reduction of price increase in Nigeria.
The Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, who announced this on Tuesday in Abuja in a statement by his spokesman, Louis Ibah, said that the measure would begin on November 1, 2024.
According to the statement, the decision was sequel to a high level meeting convened by the minister in Abuja with stakeholders to address the skyrocketing price of gas and attendant hardship in the country.
Recall that the price of cooking gas increased from N700/kg in June 2023 when President Bola Tinubu assumed office to N1,500/kg in October 2024. This represents about a 114 per cent increase within the 16 months.
Determined to address the price hike, the minister set up a high profile committee in November 2023 led by the Chief Executive of the NMDPRA, Mr Farouk Ahmed, with key stakeholders in the LPG value chain.
But despite the move, prices have continued to fluctuate from N1,100 – N1,250 – N1,500 per 1kg
To reduce the price, the minister, in a new directive, has given short-term and long-term targets.
“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,” Ekpo said.
He has also directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority to meet with stakeholders to derive the pricing framework within 90 days.
“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,” the statement said.
The statement added that within 12 months, facilities would be developed to blend, store, and deliver LPG, ending exports until the market achieves sufficiency and price stability.