Nigerians express worry over the skyrocketing price of cooking gas
| By Anayo Ezugwu | Feb 13, 2017 @ 01:00 GMT |
CONSUMERS and sellers of Liquefied Petroleum Gas, LPG, also known as cooking gas, in Nigeria are worried over the scarcity of the product and ts attendant price increase. This is happening despite the arrival and discharge of 13,000 metric tonnes of fondly called cooking gas, in Lagos, in January by the Nigeria Liquefied Natural Gas, NLNG, Limited. A market survey conducted by Realnews shows that the price of cooking gas is increasing on a daily basis.
Consumers are paying as high as N5,000 to refill a 12.5-kilogramme cylinder of gas and N2,500 for a six kilogramme cylinder in Lagos. Ifeanyi Edeh, a retailer at Iba, a suburb of Lagos, told Realnews that in December 2016, he sold a 12.5 kilogramme cylinder gas for N3, 500 and six kilogramme for N1,800. But in early January this year, the price sold between N4,500 and N4,800.
Another retailer at Ajuwon, Lagos, who gave his name as Innocent, observed that despite the increase in price, people are still using cooking gas unlike before, when some of them switched to kerosene or charcoal. He said the price of cooking gas could go up because of the rumour that there is no gas at the Apapa Wharf.
To stem the tide of persistent dislocations in the supply chain, the marketers of the product have also called for statistics on national consumption to ensure consistent additional supply to keep pace with the astronomical increase in LPG consumption in the country.
Kudo Eresia-Eke, general manager in charge of external relations, NLNG, who had confirmed the discharge of the 13,000MT over two weeks ago, also added that the vessel is scheduled to return to NLNG’s facility in Bonny to re-load..
The NLNG had also attributed the current hike in the price of the product to what it described as the recent delays in the discharge of LPG vessel at the receiving facilities in Apapa, Lagos. The company had also argued that the multi-use terminal at Apapa, which accord berthing priority to vessels discharging other petroleum products led to the temporary supply disruption.
Also in line with the position of LPG marketers that the international pricing of the product also contributes to the price hike, Eresia-Eke also admitted that Nigeria LNG’s domestic LPG price is based on an international price index plus 50 percent of the shipping cost of delivering the product to receiving facilities in Lagos. According to him, that price is invoiced in Naira at the prevailing official interbank exchange rates.
On its part, the Nigeria Liquefied Petroleum Gas Association, NLPGA, said the high cost of importation of cooking gas equipment is seriously affecting the industry and threatening its growth. The NLPGA said if the situation persisted, the growth of the LPG market in the country could be hampered.
Dayo Adeshina, president, NLPGA, in a press statement, called for the reduction of the tariff on LPG equipment and accessories, insisting that if left unchecked, millions of households and businesses would be affected by the situation. “Factors that continue to affect and hinder the growth of the industry include tariff on LPG equipment. These pieces of equipment are imported and the tariffs on them have increased tremendously.
“The local tools manufacturing company that used to give us some of these components is shut down and we are hoping for incentives from the government so that the tariffs won’t be high. For the first time, we saw the federal government making pronouncements through Vice President Yemi Osinbajo, on LPG. However, we were shocked when the list of tariffs came out and we didn’t see anything relating to LPG. This shows there is a disconnect somewhere and we hope that this will be addressed in the shortest possible time.”
According to Adeshina, Nigerians were beginning to appreciate the benefits of LPG going by a large number of households now using the product for domestic purposes. He explained that if fully tapped into, LPG had the capacity to promote a cleaner and safer environment. “With increased awareness, Nigerians are beginning to see the many benefits of LPG. It has other uses apart from the purpose of cooking alone. It is the cleanest fuel you can come across today.
“If the government intervenes, we can shift from 500,000 tonnes per annum to two million tonnes per annum. So we need the support of the government on tariffs and duties, including other critical areas to improve our capacity and deliver better services to Nigerians. We expect that by the third quarter of this year, decisions that will bring in investors would have been taken so that the industry can move forward,” he said.