Peniel Williams
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, has directed the Nigerian National Petroleum Company Ltd. (NNPC Ltd.) and Liquefied Petroleum Gas (LPG) producers to cease the export of LPG produced in Nigeria from 1st November 2024.
The announcement was made during a meeting with stakeholders in Abuja, aimed at addressing the steep rise in LPG prices and the resulting hardship for Nigerians.
In a statement issued by his spokesperson, Louis Ibah, the minister expressed concern over the continuous increase in domestic LPG prices, which has placed a heavy burden on households. He outlined measures intended to improve affordability and availability of the essential commodity.
“As a short-term solution, with effect from November 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 stated.
He also addressed the issue of pricing, announcing that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) would engage with stakeholders to establish a domestic LPG pricing framework within 90 days. This new framework would index prices to the cost of in-country production, rather than relying on external market indices such as those in the Americas and Far East Asia. According to the minister, this change would help ensure that Nigerians do not pay higher prices for a commodity that is produced domestically.
Mr Ekpo further outlined a long-term plan to develop facilities for blending, storing, and distributing LPG within 12 months. This development aims to halt exports until the local market reaches sufficiency and price stability, ensuring that Nigerians benefit directly from their country’s resources.
The minister emphasised that these directives are designed to address underlying challenges in the LPG sector and to guarantee affordable access to cooking gas for Nigerians. “These new measures will improve availability and ensure affordability, protecting Nigerians from the economic hardship caused by the LPG price hike,” he said.
It is worth recalling that in November 2023, in response to rising LPG prices, the minister established a high-level committee led by the Chief Executive of NMDPRA, Farouk Ahmed, which included key stakeholders in the LPG value chain. Despite these efforts, prices have continued to fluctuate, recently climbing to N1,500 per kilogram from an average of N1,100 – N1,250 per kilogram.
With the new directive taking effect in early November, stakeholders and consumers alike hope for a stabilisation in the market that will ease the financial pressure on Nigerian households.
