Nigeria's Federal Government Directs Crackdown on LPG Hoarding as Prices Surge

The Nigerian federal government has launched a coordinated effort to combat liquefied petroleum gas (LPG) hoarding, illegal diversion, and speculative pricing practices that have driven cooking gas prices to unsustainable levels across the country. Following an emergency stakeholders' meeting convened by the Federal Ministry of Petroleum Resources, the government has directed the Department of State Services (DSS), Economic and Financial Crimes Commission (EFCC), and Nigeria Police Force to intensify enforcement against malpractices. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has been tasked with strengthening market surveillance and working alongside security agencies to eliminate artificial scarcity and improve transparency in distribution and pricing mechanisms.

The crisis reflects significant price disparities between official benchmarks and actual consumer costs. The NMDPRA reported that cooking gas is selling at N1,600 to N2,100 per kilogramme in southwestern Nigeria, far exceeding the regulator's indicative price range of N1,018 to N1,177 per kilogramme. Similar gaps exist in other regions, with north-central consumers paying N1,550 to N1,950 per kilogramme against a benchmark of N1,066 to N1,224, and south-south residents paying N1,400 to N2,000 compared to an official guide of N1,021 to N1,179. These disparities are attributed to non-cost-reflective pricing by wholesalers and retailers, distribution bottlenecks, and supply constraints resulting from export diversion.

Government officials have emphasized that rising LPG prices are placing severe pressure on household budgets and increasing the cost of essential goods, making urgent action necessary. President Bola Tinubu has directed relevant agencies to take proactive steps to address the situation. The Permanent Secretary of the Ministry of Petroleum Resources, Patience Oyekunle, highlighted LPG's critical role as both a household energy source and a key component of Nigeria's energy transition agenda. The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, outlined a multi-faceted approach requiring marketers to increase imports and ensure transparent pricing, transporters to enhance truck availability and reduce logistics costs, and retailers to display prices clearly and avoid arbitrary increases.

Recent data shows modest improvements in domestic supply dynamics. National LPG supply sufficiency increased from 11 days to 22 days between May and June 2026, while average daily supply rose from 4,262 metric tonnes to 5,040 metric tonnes during the same period. However, production constraints persist, with major domestic producer Chevron Nigeria Limited exporting its entire output of 148,222 metric tonnes (22.93 percent of national production) between January and May 2026, depriving the local market of crucial supply. Nigeria LNG and the Dangote Petroleum Refinery produced 187,559 and 105,127 metric tonnes respectively during the period.

The government is pursuing several structural interventions to address supply and affordability challenges. These include exploring a local LPG blending initiative with Nigeria LNG, local producers, and the Port Harcourt plant operator to reduce import pressure and logistics costs. The NMDPRA is also engaging the Nigerian Upstream Petroleum Regulatory Commission and the Ministry of Petroleum Resources to secure increased domestic supply for the local market. Stakeholders have pledged support for expanded storage and distribution infrastructure, increased domestic production, enhanced product tracking systems, and stronger inter-industry collaboration. The minister has made clear that success will be measured by increased LPG availability, improved distribution efficiency, and sustained price reductions nationwide.