Featured, Oil & Gas

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Demand for liquefied petroleum gas goes down following an upward move of its price since last October

|  By Anayo Ezugwu  |  Apr. 15, 2013 @ 01:00 GMT

PRICE of the Liquefied Petroleum Gas, LPG, fondly called cooking gas, has gone up in the last three months. A market survey conducted by Realnews magazine shows that consumers are paying as high as N3, 500 to refill 12.5 kilogramme cylinders and N16, 000 for 50 kilogramme cylinders in Lagos.

Ifeanyichukwu Moses, a retailer in Lagos, said there is a slight increase in the price of cooking gas. He explained: “Early last year, refilling of 12.5kilogramme cylinder cost between N3, 000 and N3, 100, while a 50 kilogramme cost between N14, 000 and N15, 000. The cost of refilling a 12.5 kilogramme cylinder since October has been N3, 500, while that of 50-kilogramme has also increased to N16, 000.”

Dominic Okpe, another retailer in Lagos, said the market is slow. He attributed it to the high cost of the product. “The market is not good for now because I’m not getting good patronage compared to when the price was moderate. Many of my customers said they are no longer using cooking gas because they cannot afford the price,” he said.

A driver with TEDCO GAS plant, who gave his name as Uche, said that there is an increase in the price of cooking gas which they said came from the government and which is affecting the customers of the company. “Since October last year, the price has been N2, 700 for a 12.5 kilogramme and N11, 000 for a 50 kilogramme. The problem we are witnessing now is from the government; whenever they reduce the price, everybody will know. As a driver, I know my distribution capacity before, but since the increase, the demand has gone down which also affects my distribution,” he said.

But, Auwalu Ilu, chairman of the Nigeria Liquefied Petroleum Gas Association, said the increment was as a result of winter season in some parts of the world which led to higher demand for the product. According to Ilu, during the winter period, prices normally go up and because Nigerians are paying international price, the price change must affect the local market.

“We are paying international price for the cooking gas and the demand is so high at the international market due to the winter but it is not permanent. If you observe now, you will find out that the price has started to come down and it will continue like that until it gets back to normal,” he said.

Although Nigeria is among the top producers of cooking gas in the world, the country is ranked among the lowest consumers of the product. It was estimated that the total consumption of cooking gas in the country is just about 100,000 metric tonnes per year. But Ilu said Nigerians consumed a total of 145,000 metric tonnes of liquefied petroleum gas in 2012. He attributed the improvement in consumption to stability in the price of the product, steady supply and greater understanding by the people. “I think the improvement recorded was due to the steady supply, stable price and people’s understanding that cooking gas is better than kerosene and other fossil fuels.”

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