FG stops cooking gas exports to tackle soaring prices

The measure, announced by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, on Tuesday, is intended to mitigate the soaring price of gas and will take effect from November 1, 2024.

This information was contained in a statement by the spokesman for the Minister, Louis Ibah, in Abuja.

Ibah stated that the decision was reached after the minister convened a high-level meeting in Abuja with stakeholders to address the skyrocketing prices and their attendant hardship on Nigerians.

The PUNCH reports that the price of Liquefied Petroleum Gas (cooking gas) has skyrocketed from N700/kg in June 2023, around the time President Bola Tinubu assumed office, to N1,500/kg in October 2024.

This represents about a 114 per cent increase within 16 months.

In a move to tackle the soaring price of cooking gas, the Minister established a high-level committee in November 2023, led by the Chief Executive of the NMDPRA, Mr Farouk Ahmed, along with 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.

But the minister, in a new directive to reduce prices, outlined short-term and long-term targets.

He said, “With effect from November 1, 2024, NNPCL and LPG producers are to stop exporting LPG produced in the country or import equivalent volumes of LPG exported at cost-reflective prices.”

In terms of the pricing framework, he directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority to meet with stakeholders to derive the pricing framework within 90 days.

The statement added, “Pricing Framework: NMDPRA will engage stakeholders to create a domestic LPG pricing framework within 90 days, indexing price to the cost of in-country production, rather than the current practice of indexing against external markets, such as those in the Americas and Far East Asia, whereas the commodity is produced in-country and the Nigerian people are required to pay a much higher price for an essential commodity with which the country is naturally endowed.”

Proffering a long-term solution, the statement noted that within 12 months, facilities will be developed to blend, store, and deliver LPG, ending exports until the market achieves sufficiency and price stability.

The statement highlighted that the Minister expressed deep concern over the continuous increase in the price of Liquefied Petroleum Gas, popularly known as cooking gas, in the country.

Ekpo’s directives are a step towards addressing the inherent challenges and ensuring that Nigerians have access to affordable cooking gas.