In this article, the federal government announced the suspension of exportation of cooking gas which is also known as liquified petroleum gas (LPG).
The federal government says it’s interacting with critical sectors to halt exportation of liquified petroleum gas (LPG) also known as cooking gas, in view of its rising cost.
The federal government said all LPG produced within the country would be domesticated to crash the price of gas.
It stated on Thursday that LPG producers in Nigeria and key stakeholders in the industry had been told to stop exporting the commodity out of Nigeria, following the recent jump in the cost of cooking gas.
Although the volume of LPG consumption in Nigeria depends on the specific timeframe, figures obtained from the Nigerian Midstream Downstream Petroleum Regulatory Authority indicated that in 2022, the total cooking gas consumption across the country was 1.4 million metric tons.
Data from the agency put total domestic production during the review period as 600,000MT, while imports accounted for 800,000MT.
In 2021, total consumption was estimated at around 800,000MT, as domestic production was about 300,000MT, while the volume that was imported in that year was put at 500,000MT.
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Cooking gas consumption has been increasing significantly, with ambitious targets to reach five million metric tons by 2029, as LPG dealers stated that though Nigeria exports the commodity, the country relies heavily on imports to meet domestic demand.
This implies that the Federal Government could stop the export of over 600,000MT of cooking gas based on its drive to crash the price of the commodity locally.
Findings showed that the cost of refilling a 12.5kg cylinder of cooking gas in Abuja, Lagos, Kano and some other states had climbed to about N18,000. It was specifically N17,500 in Abuja on Thursday, a product that sold for less than N9,000 in November last year.
LPG dealers under the aegis of Nigerian Association of Liquefied Petroleum Gas Marketers had predicted mid last year that a 12.5kg cylinder would cost N18,000 going by the incessant hikes in its cost.
To tackle this, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, constituted a committee in November 2023, headed by the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed.
But up till today (Thursday), the cost of the commodity has maintained a northward movement, as many LPG users are gradually shifting to the use of charcoal.
But while speaking on the sidelines of the internal stakeholders’ workshop in Abuja on Thursday, Ekpo stated that the Federal Government had asked LPG producers to stop exporting the commodity.
He named some international oil companies including Mobil, Shell and Chevron as producers, stressing that the government was interfacing with them to crash cooking gas prices.
In November 2023, a kilogram of cooking gas was about N700, but the product is now sold at about N1,400/kg. Some operators stated that the cost would increase further if the government fails to intervene.
“I’m in contact with the regulator, NMDPRA, we have meetings almost on a daily basis and with the producers of the gas like Mobil, Chevron and Shell. So, there is that hope that things will turn around.
“And that is also why we are having this engagement to know exactly what the problems are, so that we can address them once and for all.”
According to Ekpo, the demonstration by the federal government by withdrawing all taxes and levies on importation of gas related equipment is a big incentive.