Government Moves to Stabilize Cooking Gas Prices, Halts Exportation

The Federal Government has announced plans to halt the exportation of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, to bolster its availability in the domestic market and drive down prices.

This decision, disclosed on Thursday, comes in response to the recent surge in the cost of cooking gas, prompting authorities to direct LPG producers and industry stakeholders to cease exporting the commodity from Nigeria.

Data from the Nigerian Midstream Downstream Petroleum Regulatory Authority indicates that the total consumption of cooking gas in Nigeria reached 1.4 million metric tonnes in 2022.

However, domestic production accounted for only 600,000 metric tonnes, with imports making up the remaining 800,000 metric tonnes.

The government aims to address the imbalance between domestic production and consumption, especially with ambitious targets set to reach five million metric tonnes by 2029.

Related News:

Despite Nigeria’s status as an exporter of cooking gas, the country heavily relies on imports to meet local demand.

As part of the government’s intervention, it is expected to prevent the exportation of over 600,000 metric tonnes of cooking gas, with the goal of stabilizing prices in the local market.

The recent escalation in cooking gas prices has seen refilling a 12.5kg cylinder costing around N18,000 in major cities like Abuja, Lagos, and Kano.

This marks a significant increase compared to prices in November of the previous year, which stood at less than N9,000.

Efforts to address the situation include the establishment of a committee led by the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority in November 2023.

ADVERTISEMENT

Despite these initiatives, the upward trend in prices persists, prompting concerns among consumers and a potential shift to alternative cooking fuels such as charcoal.

Speaking on the government’s measures, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized engagements with key stakeholders to ensure compliance with the directive to halt LPG exports.

He cited ongoing discussions with international oil companies such as Mobil, Shell, and Chevron to mitigate the price surge.

While the removal of Value Added Tax (VAT) on LPG was expected to reduce costs, Ekpo acknowledged that investors may seek to maximize profits, necessitating regulatory interventions to stabilize prices.

In a related development, Ekpo addressed inquiries regarding the transition of government vehicles to Compressed Natural Gas (CNG).

He assured that efforts were underway to realize this objective, aligned with the Presidential Initiative on CNG.

Overall, the government aims to harness Nigeria’s abundant gas reserves to drive economic growth and development, as highlighted during an internal stakeholders’ workshop.

This event served as a platform to address industry challenges and chart a course towards unlocking the nation’s gas potential for national prosperity.