Federal Ban on LPG Export Triggers Sharp Price Drop

The Federal Government’s ban on the export of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has significantly reduced the commodity’s price from approximately N1,500 per kilogram to about N900/kg, according to LPG dealers.

The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) revealed this during a courtesy visit to Ekperikpe Ekpo, the Minister of State for Petroleum Resources (Gas), in Abuja. This development follows the government’s directive issued on February 22, 2024, which halted the exportation of LPG to enhance its domestic availability and drive down prices.

At the meeting, NALPGAM National President Oladapo Olatunbosun praised Ekpo for the decisive move to retain all domestically produced LPG within Nigeria. He emphasized that this policy shift has led to a notable decrease and stabilization of cooking gas prices.

Olatunbosun highlighted that during a stakeholders’ forum in February, the association had alerted the minister to the extensive export of LPG by international oil companies operating in Nigeria. He argued that diverting these volumes to the local market would negate the need for costly imports, thereby stabilizing prices domestically.

The NALPGAM president expressed gratitude to the Federal Government, noting that the intervention had reduced the price of LPG from N20 million per 20 metric tonnes to N15 million. Consequently, retail prices have also fallen from N1,400 – N1,500 per kilogram to between N900 – N1,000 per kilogram.

“We appreciate that at the parley, you promised to address the issue of LPG export amidst inadequate supply and soaring prices, and indeed, you have delivered,” Olatunbosun said. “The ban on LPG export has brought significant changes to the market, and consumers are benefiting. People who had abandoned their gas cylinders due to price hikes are returning, and we are optimistic that further strengthening of the naira will lead to even better prices.”

Responding, Minister Ekpo lamented Nigeria’s paradoxical status as a major gas producer yet one of the lowest consumers of LPG. He reaffirmed President Bola Tinubu’s commitment to expanding gas usage nationwide, praising the marketers for their role in reducing prices following the export ban.

“We could not have achieved this without your cooperation and support. Our goal is to ensure our vast gas resources are available domestically at the right price, aligning with President Bola Tinubu’s vision for the sector and the economy,” Ekpo stated.

In February, Ekpo had announced the government’s directive to halt LPG exports to ensure increased domestic supply, thereby driving down prices. He mentioned ongoing collaborations with regulatory bodies and major gas producers such as Mobil, Chevron, and Shell to resolve any challenges and ensure a steady domestic supply.

“The Federal Government has demonstrated its commitment by removing all taxes and levies on the importation of gas-related equipment, providing a significant incentive,” Ekpo said. “With the halt on LPG exportation, the increased domestic volume will lead to an automatic price reduction.”

This strategic shift aims to address long-standing issues in Nigeria’s gas sector, ensuring affordable cooking gas for the populace and bolstering the nation’s energy security.