Nigeria Pressures Chevron and Producers to Prioritise Domestic LPG Supply Amid Price Crisis

Nigeria's petroleum regulator has launched an emergency intervention to address a severe cooking gas shortage, summoning energy sector stakeholders for high-level talks on Monday and directly targeting multinational producers for prioritising exports over domestic supply. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), presenting findings to the minister of state for petroleum resources, revealed that Chevron Nigeria Limited exported the entirety of the 148,222 metric tonnes of liquefied petroleum gas (LPG) it produced between January and May 2026, despite holding a domestication target of 100 percent. This contradiction exemplifies the crisis: while Nigeria produces substantial volumes of LPG—between 5,646 and 6,451 metric tonnes daily in the first five months of 2026—the majority flows offshore rather than to domestic consumers.

The supply shortfall has driven retail prices to record levels across the country. Prices surveyed range from N1,400 to N2,100 per kilogram, compared to the NMDPRA's regulatory benchmark of N1,018 to N1,244 per kilogram—a gap of 37 to 79 percent above targets. A standard 12.5-kilogram household cylinder has roughly doubled in cost since early 2024. NMDPRA authority chief executive Rabiu Umar reported that Nigeria's year-to-date LPG supply of 565,106 metric tonnes through 18 June fell 91,966 tonnes short of the pro-rated national benchmark, with a projected third-quarter supply gap of 165,000 metric tonnes. In April alone, domestic supply slumped to just 3,573 metric tonnes daily, creating a single-month shortfall of more than 2,500 tonnes against production capacity.

Multiple factors have converged to worsen the crisis. Global supply disruptions tied to Middle East tensions have constrained imports, while domestic production is systematically diverted to export markets through existing contractual arrangements. The regulator has taken enforcement action—stopping two Chevron cargoes in December 2025—but acknowledged that ongoing jurisdictional disputes with the upstream regulator (NUPRC) limit its reach. Oil marketing companies allocated 390,000 metric tonnes for the second quarter but performed at only 4.2 percent of that volume, highlighting widespread commercial failure in the supply chain.

Recent regulatory interventions have produced modest improvements. Following stakeholder engagements in recent weeks, average daily supply increased to 5,040 metric tonnes in mid-June from 4,262 tonnes in May. National stock levels as of 21 June stood at 85.87 million kilograms, sufficient for 22 days of supply compared to roughly 11 days before intervention. NMDPRA has unveiled a six-point remedial plan that includes aggressive monitoring of import permits, audits of companies lifting volumes from NLNG and NNPC to reduce trader dominance, intensified enforcement, facilitation of foreign exchange access for critical cargoes, and technology-enabled product tracking to reduce diversion. However, these near-term measures address symptoms rather than the underlying structural imbalance between export-oriented contracts and domestic availability.