Emmanuel Addeh, Abuja
The federal government is taking new measures to halt the export of Liquefied Petroleum Gas (LPG), commonly referred to as cooking gas, in response to soaring prices across Nigeria. During a recent press conference, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, expressed significant concern over the continuing rise in LPG prices, which have recently jumped to ₦1,500 per kilogram. This represents an increase from an average of ₦1,100 to ₦1,250 per kilogram over the past few months.
To address this alarming trend, Minister Ekpo had previously established a high-level committee in November 2023, chaired by Mr. Farouk Ahmed, the Authority Chief Executive of the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA). This committee includes key stakeholders from the LPG value chain. In a meeting held in Abuja, Ekpo discussed strategies to combat the surging prices, which have imposed significant hardships on the Nigerian populace.
As part of the government’s immediate actions, starting November 1, 2024, the Nigerian National Petroleum Company Limited (NNPC) and local LPG producers will be prohibited from exporting domestically produced LPG unless they import equivalent volumes at cost-reflective prices. This approach aims to ensure that domestic supply meets local demand.
Additionally, Ekpo has directed the NMDPRA to collaborate with stakeholders to develop a domestic LPG pricing framework within 90 days. This new framework will be based on the cost of domestic production, rather than the current practice of pegging prices to external markets, which often leads to inflated costs for Nigerians.
The minister emphasized the need for these changes, noting that it is unfair for Nigerian consumers to face high prices for a resource the country naturally produces abundantly. As part of a long-term strategy, Ekpo also announced plans to develop facilities for blending, storing, and delivering LPG within the next 12 months, aiming to end exports until the local market can achieve sufficiency and price stability.
These directives are seen as vital steps towards overcoming the challenges within the LPG market and ensuring that Nigerians have access to affordable cooking gas. “The new measures aim to improve availability and ensure affordability, protecting Nigerians from the economic hardships caused by the rising prices of LPG,” the minister stated.
Recent data from the National Bureau of Statistics (NBS) highlights the impact of rising energy costs on Nigerians, noting a 60 percent increase in the price of LPG. Specifically, figures released for September 2024 show that the average retail price for refilling a 5kg cylinder rose by 4.19 percent from ₦6,430.02 in August to ₦6,699.63. Year-on-year, this price increased by 59.90 percent from ₦4,189.96 in September 2023.
State-by-state analysis reveals that Rivers State has the highest average price for a 5kg cylinder at ₦7,285.71, followed closely by Gombe at ₦7,271.88 and Borno at ₦7,089.72. In contrast, Kebbi has the lowest price at ₦5,950.00, with Kano and Benue following at ₦6,133.33 and ₦6,143.52 respectively. Regional data shows that the North-East recorded the highest average retail price for a 5kg cylinder at ₦6,929.02, while the North-West had the lowest average at ₦6,382.30.
Similarly, the average retail price for refilling a 12.5kg cylinder increased by 4.89 percent month-on-month from ₦15,552.56 in August to ₦16,313.43 in September 2024. Year-on-year, this price has escalated by 76.41 percent from ₦9,247.40 in September 2023. Rivers State again recorded the highest average retail price for a 12.5kg cylinder, underscoring the ongoing challenges faced by consumers across the country.
