FG Moves to Reduce LPG Prices by Banning Exports

Minister of State for Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo, has voiced serious concerns over the rising prices of Liquefied Petroleum Gas (LPG), commonly referred to as cooking gas, in Nigeria.

In response to the escalating costs, the Minister established a high-level committee in November 2023, led by Mr. Farouk Ahmed, the Chief Executive of the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA). This committee includes key stakeholders from the LPG value chain.

Despite these efforts, LPG prices have surged recently, climbing from an average of N1,100–N1,250 per kg to N1,500. To address this urgent issue, Ekpo convened a meeting in Abuja with stakeholders to discuss strategies to mitigate the impact on consumers.

To tackle the crisis, the Gas Minister announced the following measures:

• Short-Term Solution: Starting November 1, 2024, the Nigerian National Petroleum Company Limited (NNPCL) and local LPG producers will halt all LPG exports. They must either cease exports entirely or import equivalent volumes at cost-reflective prices.
• Pricing Framework: NMDPRA will work with stakeholders to develop a domestic pricing framework within 90 days, linking prices to local production costs instead of relying on international market rates, ensuring that Nigerians are not burdened by inflated prices for a resource the country produces.
• Long-Term Solution: Within the next 12 months, infrastructure will be established to blend, store, and distribute LPG, thereby ending exports until the market stabilizes and sufficient supply is assured.

Ekpo emphasized that these directives aim to tackle the challenges facing the LPG market and ensure that Nigerians have access to affordable cooking gas.

“These new measures are designed to enhance availability and affordability, protecting citizens from the economic strain caused by rising LPG prices,” he stated.