Export ban on cooking gas led to a significant drop in domestic prices, say marketers

YEPS
3 Min Read
Nigeria gas station

The recent ban imposed by the Federal Government on the export of Liquefied Petroleum Gas, commonly known as cooking gas, has triggered a significant drop in its price, plummeting from approximately N1,500 per kilogram to around N900/kg, as highlighted by LPG dealers during a meeting with the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, in Abuja.

The decision to halt LPG exportation, announced on February 22, 2024, aimed to boost domestic volume and consequently drive down prices, as reported by The PUNCH earlier this year. This move directed LPG producers and industry stakeholders to cease exporting the commodity outside Nigeria, responding to the surge in cooking gas costs.

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Addressing the minister in Abuja, the National President of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), Oladapo Olatunbosun, expressed appreciation for Ekpo’s decisive action in mandating the localization of all domestically produced LPG. Olatunbosun credited this policy for the notable reduction and stabilization of LPG prices within the local market.

During the stakeholders consultative forum in February, Olatunbosun had underscored the significance of retaining gas volumes for the domestic market, highlighting the adverse effects of exporting substantial gas quantities. He emphasized the potential for price stability and reduced dependency on expensive imports with a sufficient domestic supply.

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The tangible impact of the government intervention was evident, with the price of LPG significantly decreasing from N20m per 20 metric tonnes to N15m, as confirmed by the NALPGAM president. Furthermore, retail prices witnessed a corresponding decline from N1,400 – N1,500 per kilogram to between N900 – N1,000 per kilogram.

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Expressing gratitude to Ekpo for his proactive approach, Olatunbosun acknowledged the pivotal role played by the ban on LPG exportation in reshaping the market dynamics. He noted the resurgence in consumer demand and expressed optimism for further price improvements as the national currency gains strength.

In response, Ekpo lamented Nigeria’s status as a major gas producer yet one of the lowest consumers of the product. He reassured the stakeholders of President Bola Tinubu’s commitment to enhancing gas utilization across the nation. Ekpo commended the marketers for their collaboration in aligning prices with prevailing market conditions post-ban on LPG exportation.

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Highlighting the government’s initiatives, Ekpo reiterated the directive to LPG producers to halt exportation and emphasized ongoing engagements with industry stakeholders to address challenges comprehensively. He affirmed the government’s determination to ensure the availability of gas resources domestically at competitive prices, aligning with President Tinubu’s vision for the sector and the economy.

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