Nigeria’s Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, has issued a directive to stop the export of Liquefied Petroleum Gas (LPG) effective November 1, in response to escalating domestic cooking gas prices that have burdened Nigerian households.
The announcement came during a stakeholder meeting in Abuja, where the minister addressed the pressing issue of skyrocketing LPG prices.
According to Louis Ibah, the minister’s spokesperson, this decisive action aims to stabilize the domestic market and provide relief to consumers.
“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,” Mr Ekpo declared.
The minister outlined strategies that include both immediate and long-term solutions. A key component involves the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) developing a new domestic pricing framework within 90 days.
The Explainer learned, this framework will shift away from international market benchmarks to reflect local production costs.
“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 higher price for an essential commodity the country is naturally endowed with,” the minister explained.
The government’s intervention comes as LPG prices have surged to N1,500 per kg from previous rates of N1,100 – N1,250, despite earlier efforts to control prices.
In November 2023, the ministry had established a high-level committee led by NMDPRA Chief Executive Farouk Ahmed to address the challenges in the LPG value chain.
Looking ahead, the ministry has outlined a 12-month plan to develop necessary infrastructure.
“On a 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,” Mr Ekpo stated.
