To lower costs nationwide, the federal government has directed manufacturers of Liquefied Petroleum Gas (LPG) and the Nigerian National Petroleum Company Ltd. (NNPC Ltd.) to stop exporting LPG or cooking gas as of November 1.
This directive was issued by Mr. Ekperikpe Ekpo, the Minister of State Petroleum Resources (Gas), at a meeting with stakeholders in Abuja on Tuesday.
Louis Ibah, the minister’s spokeswoman, stated that the meeting’s main topic was the nation’s rapidly rising cost of cooking gas.
“On the short-term solution, with effect from Nov. 1, 2024, NNPC Ltd. And LPG producers are to stop exporting LPG produced in-country or import equivalent volumes of LPG exported at cost-reflective prices.
“On pricing framework, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), will engage stakeholders to create a domestic LPG pricing framework within 90 days indexing price to the cost of in-country production.
“This is 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 Nigerians are required to pay a higher price for an essential commodity the country is naturally endowed with.
“On long-term solution, within 12 months, facilities will be developed to blend, store, and deliver LPG, ending exports until the market achieves sufficiency and price stability,” Ibah stated
More Details
Ekpo added that the orders were a step in the right direction in dealing with the root causes and guaranteeing that Nigerians could afford cooking gas.
In order to protect Nigerians from the financial hardship brought on by the increase in LPG prices, he stated that the new policies will improve availability and affordability.
Remember how the minister formed a high-level group in November 2023 to address the skyrocketing prices? The committee was directed by Mr Farouk Ahmed, the CEO of NMDPRA, and included important players in the LPG value chain.
However, prices have remained volatile despite efforts to stabilize the market; they recently increased from an average of N1,100 to N1,250 per kilogram to N1,500.
What To Note
As retail food firms may raise their prices, the ongoing rise in cooking gas prices will put more strain on home operating expenses and exacerbate Nigerians’ inflationary problems.
Additionally, due to the increase in cooking gas prices, vulnerable segments of society may be pushed to switch from gas to firewood or other ‘dirty’ energy sources for cooking and other household tasks.
The amount of gas delivered by Nigeria Liquefied Natural Gas (NLNG) under the Domestic Liquefied Petroleum Gas (DLPG) plan has decreased in recent months, according to a subject-matter expert.
Another analyst blamed the present price increase on the federal government’s inaction with the 1980s butanization policy.
