The Nigerian government is exploring partnerships with international oil giants, Chevron and ExxonMobil, in a bid to alleviate the persistent cooking gas shortages and soaring prices.
Farouk Ahmed, chief executive officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), said this strategic move aims to bolster the domestic gas supply and provide much-needed relief to Nigerian households.
“We have been engaging stakeholders on the domestication of Liquefied Petroleum Gas (LPG) produced in-country by producers, especially Chevron Nigeria Limited (CNL) and Mobil Producing Nigeria (MPN), similar to Nigerian Liquified Natural Gas (NLNG) which has domesticated 100 percent of its Butane production since the year 2022,” Ahmed said at 2024 OTL Africa Downstream Energy Week in Lagos.
BusinessDay findings showed the price of cooking gas skyrocketed from N700/kg in June 2023, around when President Bola Tinubu assumed office, to N1,500/kg in October 2024.
This represents about a 114 percent increase within 16 months.
In recent years, the demand for cooking gas has increased due to its clean-burning properties and government encouragement for its use over other fossil fuels.
However, domestic production of LPG is not enough to meet this growing demand. With limited local supply, Nigeria depends on imports to bridge the gap, further exposing prices to global market shocks.
“NMDPRA will engage stakeholders in the development of domestic LPG pricing framework to make the product readily available and affordable to the consumers,” Ahmed explained.
He added, “Within the Midstream and Downstream sector, strong collaborations are required between regulatory agencies to facilitate ease of doing business, and between businesses to pool resources required for delivering complex projects.”
Read also: FG mulls new pricing framework to crash prices of cooking gas
NLNG is a supplier of LPG to the Nigerian market and has committed 100 percent of its LPG production, representing 40 percent of the total cooking gas consumed by Nigerians annually, leaving the larger volume for import by the oil marketing companies.
The company disclosed recently that it had delivered about 380,000 metric tonnes of LPG so far this year, out of the 1.3 million tonnes per annum national consumption figure.
Nigeria has about 209 trillion cubic feet (TCF) of gas under the ground, but the country is unable to fully explore the natural resource due to low investments in the sector.
One of the critical factors affecting the price of cooking gas in Nigeria is the fluctuating value of the naira against major international currencies, especially the US dollar.
A further analysis of the National Bureau of Statistics (NBS) data showed that the South-South recorded the highest average retail price for refilling a 12.5kg cylinder of cooking gas at N16,524.00, followed by the South-East with N16,495.78, while the North-Central reported the lowest price with N14,767.41.
In addition, the average retail price for refilling a 5kg cylinder of cooking gas increased by 7.62 percent on a month-on-month basis, from N5,974.55 recorded in July 2024 to N6,430.02 in August 2024.
Read also: Explainer: Here is why cooking gas prices are going up
But on a year-on-year basis, gas price increased by 56.25 percent, from N4,115.32 in August 2023.
Last Monday, Ekperikpe Ekpo, minister of State for Petroleum Resources (Gas), directed the Nigerian National Petroleum Company Ltd. (NNPC) and Liquefied Petroleum Gas (LPG) producers to stop LPG export with effect from 1 November.
Also speaking at the OTL event, Governor Babajide Sanwo-Olu called for stronger alliances with the private sector, young entrepreneurs, and both local and international stakeholders to unlock the potential in sustainable energy solutions across Lagos and beyond.
The governor, who was represented by Biodun Ogunleye, commissioner for energy and mineral resources, emphasised the importance of partnerships in driving innovation and building resilient energy infrastructure.
“Together, our collective efforts will foster the kind of innovation needed to transform energy systems in Lagos, Nigeria, and across Africa,” Sanwo-Olu stated.
He urged stakeholders to prioritise collaboration over competition, sustainability over short-term gains, and resilience over complacency.
The governor highlighted Lagos State’s proactive role in advancing energy accessibility and sustainability.
“Our administration has tirelessly supported energy initiatives that promote accessible, affordable, and sustainable power,” he said.
Sanwo-Olu cited the state’s public-private partnerships and international collaborations as models of resilience and innovation.
“From solar energy for street lighting to mini-grid development and the adoption of cleaner fuels for transportation, Lagos is building a future that is both greener and cleaner for all,” he noted.
Sanwo-Olu stressed that Africa’s vast energy potential, including natural gas reserves and emerging renewable energy sources, presents unique investment opportunities.
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