FG’s promise on further drop in LPG price, mere speculation – Stakeholders

Solomon Ezeme

For quite a longtime, the skyrocketing price of Liquefied Petroleum Gas (LPG), otherwise known as cooking gas, and its wide-range of effects on Nigerians and the Nigerian economy, have been on the front burner.

A lot of Nigerians who couldn’t cope with the exorbitant prices in various states, have had to resort to using kerosene and firewood which pose serious health challenges to them.

The Federal Government has, on several occasions, assured Nigerians of a reduction to original price of the commodity after months of bullish moves.

Human Rights Writers Association of Nigeria (HURIWA), a civil rights advocacy group, recently made a demand on President Muhammadu Buhari,to do everything within his powers to return the price to where it was in 2015 when he assumed office.

National Coordinator of the group, Mr Emmanuel Onwubiko expressing his regrets over the disturbing situation, said the recent marginal drop in the cost of LPG as announced by the Federal Government does not call for celebration as the said reduction which is below a thousand Naira, is insignificant compared to what was inherited by the present administration.

The price of cooking gas which was around N2,800/KG in May 2015 jumped by over 200% to about N8,800 in early January 2022.

EnergyDay’s recent investigation in Lagos on Tuesday, revealed that a 12.5kg cylinder of gas was refilled at N8,500 at Petrocam Filling Station, Lekki.

Customers at Total Filling Station in Abule-Egba Lagos bought the same at N8,400 – the very rate at which end users purchased at Oando Filling Station, Lekki-Epe in Ajah.
At another filling station in Alakuko, Ayomide, it was sold to customers at the rate of N8600/12.5KG.

A few days ago, Dayo Adeshina, Programme Manager, National LPG Expansion Implementation Plan (Office of the Vice President), came out and told the public that the Federal Government was about to put some initiatives in place to further cut down the cost of cooking gas.

Though Nigerians are hopeful that the President, or maybe the Vice President who has always been at the forefront of major gas initiatives in Nigeria, will see to it that the initiative come to light and are able to address the multifaceted issues responsible for the hike, effectively.

But until that happens, everything remains a mere speculation in the eyes of an average Nigerian who is becoming tired of the daily ‘gas expansion to reduce price’ reports in the dailies.

Recall that in April 2021, Mr Adeshina has said it would inject about 10 million cooking gas cylinders into the market in the space of one year. This was to encourage the use of cooking gas in Nigeria in furtherance of its ‘Decade of Gas’ goals.

But there were no such initiatives that would equally scale up the production and supply to make the commodity available and affordable for possessors of the cooking gas cylinders.

The FG, after about 8 months of distributing gas, is still talking about and not having and acted upon initiatives to improve storage capacity for LPG expansion.

The Government appears to be waiting for some factors other than production expansion to bring down the price. If it continues to wait and rely on such factors, Nigerians may be forced to completely abandon their gas cylinders and return to the old charcoal pots and kerosene stoves.

“It is in government’s interest for the price to go down consistently and there are certain initiatives that are being taken at the moment, which hopefully will see to further drop in price regardless of the international cost.

“The discussions are still ongoing and there are certain things that you can do to stimulate the market which will have an effect. One of them also has to do with storage.

“If you look at the international pricing of the LPG, and that might change again because it is not a fixed price, in January last year, it was $250 per tonne.

“It rose to $875 per tonne by the end of October and started dropping by the end of November into December, and came down to around $500 per tonne at some point but went up again in December to $708 per tonne.”

“Now, as of the third of January this year, that figure is $744 per tonne. So you can see there is a drop from about $800 around November to $700 in January. The issue here is that the price has been fluctuating.

“Yes you have the effects of Customs and the position of the VAT that made people pay tax for what they imported even in 2019 and 2020. Of course, some importers stopped importing, but there is a resolution going on to resolve that aspect,” Adeshina recently said.

In July 2021, marketers could no longer bear the high cost of purchasing the product. They made it known that consumers would have to pay for it as they would not want to run at a loss.

“It is unbelievable to imagine that six months back, NALPGAM members bought 20MT of LPG for less than N4m. We can’t continue to allow Nigerians to suffer due to this factor.

“You can buy 20MT for N7.5m in the morning, only to buy for N8m in the evening. By the time the marketers buy, they will have to pay for the cost of transporting the LPG bought for N8m to various destinations, and that costs between N450,000 and N600,000, depending on the distance.

“Finally, the 20MT of LPG will end up costing N8.6m. This is the reason why the cost of cooking gas will keep increasing.

“Petrol is deregulated, but we can’t understand why the government doesn’t want to deregulate the gas sector and still not make provision for the sector to thrive,” executive secretary, NALPGA’s Executive Secretary, Mr Bassey Essien, had questioned.

Nigerians want to see what becomes of the planned initiative and their overall effect on gas price, in the coming months.