Nigeria presses producers to prioritise local LPG over exports

…Targets Chevron exports

Nigeria’s petroleum regulator summoned energy sector stakeholders on Monday for emergency talks on soaring cooking gas prices, putting multinational producers on notice that exporting liquefied petroleum gas while domestic consumers pay record prices is no longer tenable.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority, presenting to the minister of state for petroleum resources, disclosed that Chevron Nigeria Limited exported every kilogram of the 148,222 metric tonnes of LPG it produced between January and May this year, contributing to a national supply gap that has pushed retail prices across six geopolitical zones between 37 percent and 79perent above regulatory benchmarks.

“Chevron’s domestication target is 100%, but their domestic supply is zero,” the regulator’s data showed, underscoring one of the sharpest fault lines in the country’s cooking gas crisis.

The disclosure came as Rabiu Umar, NMDPRA authority chief executive, told the emergency meeting that Nigeria’s year-to-date LPG supply of 565,106 metric tonnes through June 18 fell 91,966 tonnes short of the pro-rated national benchmark, with a projected third-quarter supply gap of 165,000 metric tonnes.

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Retail prices surveyed across the country ranged from N1,400 to N2,100 per kilogram, against NMDPRA’s indicative June 12 benchmark of N1,018 to N1,244, a gap the regulator attributed to profiteering, supply shortfalls, and distribution bottlenecks. A standard 12.5-kilogram household cylinder has effectively doubled in cost for many families since early 2024.

The crisis has multiple drivers. Global supply disruptions tied to the US-Israel-Iran conflict in the Middle East have crimped imports, while domestic production, strong on paper, is being bled offshore by export-oriented arrangements.

Nigeria produced between 5,646 and 6,451 metric tonnes of LPG per day in the first five months of 2026, but domestic supply in April slumped to just 3,573 metric tonnes daily, creating a single-month production-to-supply shortfall of more than 2,500 tonnes.

That gap, which NMDPRA acknowledges represents volumes exported as LPG or propane, illustrates the core policy tension: Nigeria sits on substantial gas resources, yet has never fully converted production into domestic availability.

NMDPRA stopped two Chevron cargoes in December 2025, though it acknowledged Monday that jurisdictional disputes over delineation continue to constrain its enforcement reach.

Further high-level engagement with upstream regulator NUPRC, Chevron, and the minister’s office is required, the authority said, to fully resolve shipping logistics and export permit protocols.

Following stakeholder engagements that began in recent weeks, average daily supply has nudged up to 5,040 metric tonnes in June through the 19th, from 4,262 tonnes in May. National stock levels as of June 21 stood at 85.87 million kilograms, enough for 22 days of supply, compared with roughly 11 days before regulatory intervention.

In a market this tight, that improvement matters, but it does not resolve the underlying structural problem.

To close the gap, NMDPRA laid out a six-point plan. In the near term, the authority said it will issue and monitor import permits more aggressively, audit companies lifting volumes from NLNG and NNPC to curb trader dominance at the expense of terminal operators, and intensify enforcement across the supply chain.

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The scale of commercial failure here is striking: oil marketing companies allocated 390,000 metric tonnes for the second quarter, but performed at a dismal 4.2 percent of that volume.

On the import side, the regulator is pressing relevant agencies to facilitate foreign exchange access for critical LPG cargoes and is proposing technology-enabled product tracking to reduce diversion.

Over the medium term, NMDPRA wants to redirect Chevron’s full production into the domestic market. Local blending capacity has been strengthened over the past two years, specifically to handle those volumes. Anoh Gas Processing Plant is also expected to begin supplying 50 metric tonnes per day in July, offering modest near-term relief.

The domestic consumption target is five million metric tonnes annually. Against a current benchmark requirement of roughly 1.42 million tonnes a year, coverage improved from 78.7 percent in 2024 to 88.4 percent in 2025 before slipping back to 86 percent in 2026. The direction is broadly right. The pace, households paying twice what they should for cooking gas will argue, is not.