There are indications that the price of Liquefied Petroleum Gas, LPG, generally known as cooking gas may continue to go down against the over 100 percent increase witnessed in 2021.
This development comes as LPG marketers affirm the yet to be implemented Value Added Tax, VAT on imported LPG earlier promised by the Federal Government at the third quarter last year.
EnergyDay gathered that the price of cooking gas across the country has dropped from about N10,000 and N10,500 for a 12.5kg gas cylinder to about N7,400 and N9000.
Recall that Mr. Oladapo Olatunbosun, the National President of the Nigeria Association of Liquefied Natural Gas Marketers (NALPGAM), had revealed to EnergyDay that the 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 would bring about a relative price decline in LPG.
The government had in 2019 gazetted the removal of VAT on LPG to increase its domestic utilisation.
However, in July 2021, the marketers were notified about the reintroduction of VAT on the product as the government moved to shore up its revenue sources.
Bassey Essien, the Executive Secretary, Nigerian Association of Liquefied Petroleum Gas Marketers, NALPGAM, urged the government to urgently clarify its position on the issue.
“The announcement that the government was reintroducing VAT on imported LPG created panic in the market which led to the hike we experienced in the prices of cooking gas in 2021.
“Some marketers stopped importation, and don’t forget that about 60 per cent of LPG consumed in Nigeria is imported.
“The NLNG only supplies about 450,000MT and our LPG consumption is over one million metric tonne, so imposing VAT on imported LPG affected the market.
“However, the government is yet to begin a collection of VAT payment in spite of the announcement which has encouraged more marketers to restart importation.’’
He said the impact was currently being felt like the prices of cooking gas has reduced from about N10,000 and N10,500 for a 12.5kg gas cylinder to about N7,400 and N9000, across the country.
According to Mr Essien, supply has increased and as it continues, the prices will continue to decline but it is still a far cry from where we were coming from.
“In January 2021, a 20 metric tonne truck was about N4 million but it is currently about N9.7 million.
“We have to look at all the factors that drove the prices up including LPG demand in the international market and find a way to domesticate LPG supply to ensure price stability.’’
Also, Michael Umudu, National Chairman, Liquefied Petroleum Gas Retailers (LPGAR), branch of National Union of Petroleum and Natural Gas Workers (NUPENG), said the decline in the prices of cooking gas was a welcome development.
Mr Umudu said: “we as retailers suffered so much because many of our customers switched to charcoal and firewood because they could no longer afford to buy gas.
“Now, supply is increasing and we are hoping that if it is sustained, there will be further reduction in the price of cooking gas.