The Nigeria LNG Limited (NLNG) has suspended its exportation of cooking gas in a strategic move to only supply the local market by 100%.
In a statement in which this development was disclosed, NLNG said its board of directors has given approval for it to only supply the Nigerian market its produced Liquefied Petroleum Gas (butane and propane).
Prioritising the domestic market, NLNG made it known that it had already developed a scheme to sustainably supply propane for usage in cooking gas blending as well as in agro-allied, autogas, power and petrochemical sectors of the Nigerian economy to further deepen gas utilisation in the country.
The company further said the initiatives were designed to increase LPG availability in Nigeria, diversify its uses and support the Federal Government’s Decade of Gas initiative.
“Committing 100 per cent of our LPG supply is a major milestone in our journey of domestic gas supply. We supplied our first butane cargo into the domestic market in 2007, which helped to develop over the years the LPG industry in Nigeria from less than 50,000 tonnes to over 1 million tonnes market size annually by the end of 2020.
“In 2021, we increased our LPG supply commitment from 350,000 metric tonnes (or 28 million 12.5kg cylinders) to actual delivery of 400,000 metric tonnes (or 32 million 12.5kg cylinders) thereby directing most of our production into the domestic market.
“But this was not enough for NLNG, hence this commitment to do all that we possibly can and supply 100 per cent of our LPG production to the domestic market,” the statement quoted Dr Philip Mshelbila, the Managing Director and Chief Executive Officer, NLNG, as saying.
What this means
Should the 100% supply commitment for domestic consumption be fully complied to, it would likely reduce the cost of the commodity.
BizWatch Nigeria understands that cooking gas prices recently experienced a decline from N8,800 to between N8,400 and N8,200. In some outlets, the price of the commodity dropped to between N7,800 and N8,000. These prices are exciting for many Nigerians, as the commodity increased by over 240% between January and October last year (2021).
In the first 10 months of 2021, cooking gas moved up from N3,000 for 12.5kg to N10,200.
Giving reasons to why gas prices were so high last year, marketers blamed it on the scarcity of the product, as importation levies didn’t allow many of them to do business.