FG plans cooking gas export ban to crash price
The Federal Government plans to halt the export of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, to boost domestic supply and lower prices. This decision follows a recent rise in cooking gas costs.
Stakeholders in the LPG industry, including producers, have been instructed to cease exporting the commodity from Nigeria. According to data from the Nigerian Midstream Downstream Petroleum Regulatory Authority, domestic LPG consumption in 2022 totaled 1.4 million metric tonnes. During this period, domestic production was 600,000MT, while imports stood at 800,000MT.
In 2021, total consumption was approximately 800,000MT
In 2021, total consumption was approximately 800,000MT, with domestic production at 300,000MT and imports at 500,000MT.
There’s been a notable rise in cooking gas consumption, aiming to hit five million metric tonnes by 2029. Despite Nigeria’s LPG exports, the country heavily depends on imports to fulfill local demand.
This suggests that the Federal Government might halt the export of over 600,000MT of cooking gas as part of its efforts to lower domestic prices.
Research indicates that the price of refilling a 12.5kg cooking gas cylinder in cities like Abuja, Lagos, and Kano has surged to approximately N18,000. Specifically, in Abuja, the cost was N17,500, contrasting sharply with less than N9,000 just a year prior.
LPG dealers, represented by the Nigerian Association of Liquefied Petroleum Gas Marketers, had foreseen this increase, predicting a N18,000 cost for a 12.5kg cylinder mid-last year due to consistent price hikes.
Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo,
To address this issue, Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, formed a committee in November 2023, led by Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
As of today (Thursday), the price of cooking gas continues to rise, prompting many users to consider shifting to charcoal as an alternative.
In November 2023, a kilogram of cooking gas was priced around N700
During an internal stakeholders’ workshop in Abuja, Ekperikpe Ekpo disclosed that the Federal Government has instructed LPG producers, including international oil companies like Mobil, Shell, and Chevron, to halt exports. The government is engaging with them to reduce cooking gas prices.
In November 2023, a kilogram of cooking gas was priced around N700, but it has now doubled to about N1,400/kg. Some industry insiders warn that prices could escalate further without government intervention.
Ekpo highlighted the Federal Government’s efforts to address gas-related issues by removing taxes and levies on gas-related equipment imports, which serves as a significant incentive.
Regarding LPG (cooking gas), he emphasized ongoing discussions with key stakeholders to cease its exportation, ensuring that all domestically produced LPG remains within the country. This move is expected to boost volume and subsequently lower prices.
He stated ongoing communication with the regulator, NMDPRA, and regular meetings with gas producers like Mobil, Chevron, and Shell, expressing optimism for positive outcomes.
In November 2023, a kilogram of cooking gas was priced around N700
During an internal stakeholders’ workshop in Abuja, Ekperikpe Ekpo disclosed that the Federal Government has instructed LPG producers, including international oil companies like Mobil, Shell, and Chevron, to halt exports. The government is engaging with them to reduce cooking gas prices.
In November 2023, a kilogram of cooking gas was priced around N700, but it has now doubled to about N1,400/kg. Some industry insiders warn that prices could escalate further without government intervention.
