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FG bans LPG export, gives fresh directives to crash price

LPG cylinders

By Tochukwu Bliss, Abuja

Effective November 1, 2024, the Federal Government has banned the export of locally produced liquefied petroleum gas (LPG), popularly called cooking gas.

The government also banned the import of equivalent volumes of LPG exported at cost reflective prices.

These measures are part of fresh directives issued yesterday by the Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, to crash the price of the commodity in Nigeria.

He was quoted as saying that: “The new measures aim to improve availability and ensure affordability to protect Nigerians from the economic hardship caused by LPG price hike.”

A statement from the Minister’s Spokesperson, Louis Ibah, said the move stems from Mr. Ekpo’s deep concern over the continuous rise in the price of cooking gas in-country.

The minister was said to have convened a meeting with stakeholders in Abuja yesterday, to address the skyrocketing price and attendant hardship on Nigerians.

The new measures aim to improve availability and ensure affordability to protect Nigerians from the economic hardship caused by LPG price hike.

Specific directives include:

  • Short term solution: With effect from November 1, 2024, NNPC Limited and LPG producers are to stop exporting LPG produced in-country or import equivalent volumes of LPG exported at cost reflective prices.
  • Pricing framework: The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), will engage stakeholders to create a domestic LPG pricing framework within 90 days. They are to index price to the 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.
  • 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’s directives are said to be a step towards addressing the inherent challenges and ensuring Nigerians have access to affordable cooking gas.

Recall that in a bold move to tackle the soaring price of cooking gas, the Gas Minister had established a high-level committee in November 2023, led by the Authority Chief Executive, NMDPRA, Farouk Ahmed, which comprised key stakeholders in the LPG value chain.

However, despite this effort to address the issue, prices have continued to fluctuate, recently soaring to N1,500 from an average of N1,100 – N1,250 per kg.

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