The federal government has directed the Nigerian National Petroleum Company (NNPC) Limited and liquefied petroleum gas (LPG) producers to stop exporting the product by November 1.
Speaking during a meeting with stakeholders on Tuesday in
Abuja, Ekperikpe Ekpo, minister of petroleum resources (gas), said the
directive was given due to the hike in prices of LPG, also known as cooking
gas.
“As Minister of State for Petroleum Resources (Gas), I am
deeply concerned about the persistent rise in the price of Liquefied Petroleum
Gas (LPG), commonly known as cooking gas,” he said.
“Despite previous efforts, including the establishment of a high-level committee led by Mr. Farouk Ahmed, the Chief Executive of the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA), to address the issues, prices have continued to fluctuate, recently reaching N1,500 per kg from an average of N1,100–N1,250.”
The minister said he issued three directives to address the
skyrocketing price of the product and its attendant hardship on Nigerians.
He said NNPC and local producers can either stop exporting
the product or import equal volumes of exported LPG at cost-reflective prices.
“Short Term Solution: With effect from November 1, 2024,
NNPCL and LPG producers are to stop exporting LPG produced in-country, or
import equivalent volumes of LPG exported at cost reflective prices,” he said.
EKPO DIRECTS NMDPRA,
STAKEHOLDERS TO STOP INDEXING PRICES TO EXTERNAL MARKETS
Ekpo directed the Nigerian Midstream and Downstream
Petroleum Regulatory Authority (NMDPRA) and stakeholders to stop indexing the
price of the product to external markets.
He said NMDPRA and stakeholders should create a domestic LPG
pricing framework within 90 days, which will index the price to the cost of
production in the country.
“Pricing Framework: NMDPRA will engage stakeholders to
create a domestic LPG pricing framework within 90 days, indexing price to 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,” Ekpo
said.
“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.”
Speaking on the directive, Ekpo said they aim to improve
availability and ensure affordability to protect Nigerians from the economic
hardship caused by the hike in LPG prices.
“These measures are essential to improving LPG availability,
stabilizing prices, and easing the economic burden on Nigerians. Our goal is to
ensure that every Nigerian can access affordable cooking gas,” he said.
According to the National Bureau of Statistics (NBS), the
average price of 5 kilogrammes (KG) of cooking gas increased to N6,699.63 in
September.
In February, the federal government announced the suspension
of LPG exports.
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