June 22, 2024

Cooking gas price crashes, as importers flood market with product


Oredola Adeola

The prices of Liquefied Natural Gas(LPG) fondly called cooking gas have crashed due to increase in volume of the product imported into the country, and dedication of more gas terminals for the storage and distribution of the product across the country.

This was revealed by Mr. Oladapo Olatunbosun, the National President of the Association in an exclusive interview with EnergyDay on Wednesday in Lagos.

The Association noted that other macroeconomic variables including declining price of LPG in the international market are responsible for the improvement in the market.

The NALPGAM President cautioned that the stable price is not a guarantee that the price will continue to decline for long, noting that rising overhead cost, exchange rate volatility, and other variables are affecting the prices.

He said gas importers still have to source for foreign exchange to be able to import more of the product into the market.

He stated that, “Don’t also forget that the bulk of gas produced locally are supplied by the Nigeria Liquefied Natural Gas(NLNG). NLPG supplies the market with 450,000 metric tons of LPG, the balance of 850,000 metric tons out of 1.3million metric tons of domestic demand, is being imported by the marketers, hence the need to source for Forex for importation.

“Contrary to speculation that the price could rise further in December, it has remained stable at the current price of between N8,500 and N9,000 for a 12kg gas cylinder in some parts of the country. This is largely because of the decision of some terminals to import more gas into the country.

“20 metric ton truck of gas which used to be sold for N11m, is now selling for around N10 million. The patronage is increasing in all of our members’ plants across the country. This has potential to reduce further if the supply is sustained.

Olatunbosun also commended the government for putting up measures to address some of the issues raised by NALPGAM in its open letter addressed to the Minister of State for Petroleum Resources, Chief Timipre Sylva, in November calling for urgent intervention in the skyrocketing price of LPG in Nigeria.

He urged the government to do more to encourage domestic production of gas, insisting that Nigeria can’t survive under importation of LPG.

The NALPGAM President said, “The price will come down but may not come down to N3.4m as it used to be in January 2020. It is likely to reduce to 9million to 8 million per 20 metric ton truck of gas, but I don’t see it decline in the near future.

“The exchange rate, inflation, over head costs, VAT and custom duties are still there for marketers to contend with. Government at all levels want to generate more revenue from the marketers. Some of these factors are growing daily,” the NALPGAM President said.

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