FG Mandates Regulatory Crackdown on LPG Market Manipulation Amidst Price Surge
The Federal Government has initiated a decisive regulatory intervention, ordering a comprehensive clampdown on Liquefied Petroleum Gas (LPG) marketers implicated in hoarding or diversion of the product. This directive follows a significant escalation in cooking gas prices, prompting urgent action to stabilise the market and protect consumers.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), alongside other relevant regulatory bodies, has been tasked with intensifying market surveillance. The mandate includes thorough investigations into instances of product hoarding and diversion, with a clear directive to sanction operators found to be engaging in market manipulation. This strategic move underscores the government’s commitment to ensuring fair market practices and product availability.
The directive was issued by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, during an emergency stakeholders’ engagement convened to address the escalating LPG prices. The meeting, which involved regulators, producers, marketers, and other key industry players, sought to identify the root causes of the price volatility and formulate immediate remedial measures.
According to the NMDPRA, the current surge in LPG prices is attributable to a confluence of factors. These include global supply disruptions and price volatility stemming from geopolitical tensions, specifically the Israel-Iran conflict. Domestically, the situation is exacerbated by shortfalls in local supply, attributed to incomplete domestication of local LPG production, reduced import volumes, and non-cost-reflective pricing strategies adopted by some wholesalers and retailers. Furthermore, inadequate distribution infrastructure and persistent logistics challenges have contributed to the supply constraints.
In response, Minister Ekpo has charged the NMDPRA to collaborate with Nigeria Liquefied Natural Gas Ltd. (NLNG), local LPG plants, and major producers to bolster domestic availability. The objective is to enhance market coordination and dismantle distribution bottlenecks that are currently impeding the smooth flow of LPG to consumers.
“NMDPRA and other regulators should intensify monitoring, publish market updates, investigate hoarding and diversion, and sanction operators who manipulate the market,” Minister Ekpo stated, emphasising the need for transparency and accountability. He further directed producers and domestic suppliers to prioritise the Nigerian market, furnish reliable supply forecasts, and ensure that domestic allocations reach consumers without diversion or undue delay. Depot owners and terminal operators are also mandated to publish loading schedules, disclose stock and evacuation levels, ensure equitable access for marketers, and optimise truck turnaround times.
The Minister also enlisted the support of security agencies, including the Department of State Service (DSS), the Economic and Financial Crime Commission (EFCC), and the Nigerian Police Force (NPF), to bolster regulatory efforts in combating diversion, hoarding, illegal storage, and any disruptions to legitimate LPG distribution channels.
Marketers and importers have been urged to augment LPG volumes where necessary, disclose cargo arrival schedules, price products responsibly, and refrain from speculative withholding of supplies. Transporters and logistics operators are expected to increase truck availability, resolve delivery bottlenecks, maintain transparency in haulage costs, and ensure prompt nationwide product movement. Retailers and plant operators are required to display prices openly, avoid arbitrary increases, adhere to safe dispensing practices, and promptly report supply disruptions.
Consumer protection and public communication agencies have been assigned the role of keeping the public informed, establishing reporting channels, countering misinformation, and promoting safe LPG handling practices. Minister Ekpo stressed that these assigned responsibilities must translate into tangible improvements for Nigerians, demanding visible and impactful outcomes from all stakeholders.
The government reiterated its commitment to monitoring market developments, safeguarding consumer interests, fostering responsible investment, and advancing a gas-powered economy. The focus remains on increasing domestic supply, reducing import dependency, and ensuring that Nigerian-produced LPG is prioritised for local consumption.
Preliminary assessments from the NMDPRA indicate that planned LPG supply volumes for June are projected to exceed estimated national demand, contingent upon timely delivery and efficient distribution. Marketers have signalled their readiness to increase imports as needed, and anticipated supplies from new domestic facilities, such as the Seplat gas facility, are expected to further enhance market availability.
In a significant development, the federal government is exploring a local LPG blending initiative involving NLNG, local producers, and the Port Harcourt plant operator. This initiative aims to reduce logistics costs, improve supply reliability, and contribute to more stable pricing.
The Permanent Secretary, Ministry of Petroleum Resources, Mrs. Patience Oyekunle, underscored the critical role of LPG in Nigeria’s energy landscape, its importance to the clean cooking agenda, and the energy transition. She acknowledged the widespread concern generated by the recent price increase, necessitating urgent and practical measures to enhance affordability, ensure supply stability, sustain investments, and strengthen the domestic LPG market for the benefit of all Nigerians. The stakeholders present at the meeting, including representatives from the Decade of Gas, Nigeria Gas Association, Seplat Energy, Chevron, NMDPRA, Nigeria Liquefied and Compressed Gas Association, and the Nigerian Association of Liquefied Petroleum Gas Marketers, expressed strong commitments to addressing these challenges and bolstering domestic market supply and sufficiency.
