CEM REPORT, ENERGY | Liquefied Petroleum Gas (LPG) has become an essential commodity in Nigerian homes as food cannot be made without it. However, many have begun to switch to the crude means of firewood and charcoal to make food as the cost of cooking gas has outweighed the pocket of the regular average Nigerian.
The price of cooking gas recently hit a thousand naira (₦1,000) in many parts of Lagos according to a street report by CEM. The price of kerosene is also along the same range making it almost impossible for food to be made in many families in the country. The price of cooking gas may go up still as Nigeria’s biggest seller of the product has placed a ban on further export of the product.
Niger, Nigeria’s largest supplier of liquefied petroleum gas (LPG) recently placed an indefinite ban on all exports of the product in a bid to ensure the product is readily and cost affordable for its citizenry.
In a statement by the Niger government, it noted that “National production should be used to supply the domestic market, and in case of surplus a special authorisation can be requested to export it.”
While Nigerians have always lived in hope for the future, the future seems bleak, especially with the momentous rise of the dollar which has led to a steady increase in the cost of living as food prices have skyrocketed months before the December festivity.
However, hope might not all be lost as Nigeria has the 9th largest reserves of natural has. Although the sector continues to lay fallow as no government has taken the bull’s horn of investing in the 209 Trillion Cubic Feet (TCF) and 600 TCF potential molecules reserve
Recall that both countries in 2020 signed a Memorandum of Understanding for petroleum products importation. The agreement was formally signed in the presence of the respective ministers of state for petroleum, Timipre Sylva representing Nigeria and Foumakoye Gado representing Niger Republic.
Niger exports Petroleum Gas to Nigeria, Azerbaijan, Sao Tome and Principe, and Belgium. The country also imports petroleum gas primarily from Nigeria, United States, Netherlands, Equatorial Guinea and Angola.
Perhaps, Niger is taking a cue from Russia, which has suffered high domestic prices and shortages of gasoline and diesel in recent months despite being one of the world’s top oil producers.
Russia has been battling shortages and high fuel prices in recent months as high export prices made it advantageous for refiners to sell their products abroad. Fuel oil is in high demand for the Arctic and other regions, which are facing a severe winter.
According to a document published on the Kremlin website, Russia on Sept. 21 introduced a ban on fuel exports to fight high gasoline and diesel prices as well as fuel shortages, especially during harvesting season.
The government said on Thursday there was no deadline for lifting the ban and the restrictions would be in place for as long as needed adding that other measures to ensure the stability of the fuel market would be considered once the ban was lifted.
“The government has already repeatedly noted… that there is no deadline here, the ban will continue as necessary. Once there is no longer a need for this, other measures will be considered.”
Since the ban was introduced, wholesale diesel prices on the local exchange have fallen by 21%, while gasoline prices are down 10%.
The government is also considering hiking export duty for resellers and the introduction of export quotas, similar to the measures on the sales of fertilizers.
The puzzle here is “do you think any Nigerian government (past or present) will ban or consider suspending the exportation of any product to create more availability for its citizens? Leave your thoughts in the comments section.
