The prices of Liquified Petroleum Gas (cooking gas) have hit an all-time high of N1000 per kg in some parts of the country including Lagos, Abuja, and Kano, a survey conducted by EnergyDay has shown.
The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has therefore warned that prices could reach between N1200 and N1500 per kg by December 2023, if the Federal Government fails to call importers and off-takers to order.
The marketers revealed that the soaring prices are a cause for concern for many Nigerians, especially for those who rely on cooking gas for their daily cooking needs. They noted that patronage at some of the gas plants across the country is dropping on a daily basis due to price hike as people seek unhealthy alternatives.
EnergyDay survey of the market in the last three weeks of September 2023 showed that the price of cooking gas in Lagos, Kano, Port Harcourt, and Abuja has increased to between N800 and N900 per kilogram at the retail end.
In Lagos, the prices vary in different parts of the state, with prices ranging from N650 to N900 per kg.
Mr. Oladapo Olatunbosun, President, National Association of Liquefied Petroleum Gas Marketers (NALPGAM) in a chat with EnergyDay, warned that if the indiscriminate price fixing by LPG producers, importers, and terminal owners is not curbed, a kilogram of cooking gas could soon be sold for between N1200 and N1500.
He also emphasised that 12.5kg cylinder could hit N13,000 by December, making cooking gas a luxury item that the common man can no longer afford.
The NALPGAM President said, ” Very soon a common man will no longer use gas again in Nigeria.
“As of today, 20 million metric tons is N14 million, and there is an attempt by the gas tank farm owners and offtakers to increase the price far above what the marketers can afford.
Olatunbosun further criticized the sharp increase in the domestic price of cooking gas in Nigeria from N650 to above N900 in less than one week.
He noted that it is unfair for importers to immediately adjust the domestic price of cooking gas when the international price had barely gone 3.61% up to the $2.7476 per gallon mark, which is still relatively low compared to the global trend of rising gas prices.
He said, “Serious economies are taking measures to cut the prices of cooking gas to rein in inflation, while gas importers and offtakers in Nigeria have enjoyed the liberty of raising prices due to higher international oil prices.
The President of NALPGAM further hinted that LPG price has been consistent despite fluctuations in the international pricing framework, lamenting that despite this development, the prices of cooking gas in Nigeria have been on the rise, and retailers are being forced to increase by 80% in the next three months.
Mr. Olatunbosun alleged that the importers and producers in Nigeria increased the price of petroleum product by more than 27 and 30% when the international rate had barely increased by 0.28%.
He said, “Currently, 1kg of gas is being sold for N900, N950, and N1000 in most places across Nigeria.
“Why are the importers comparing the situation in Europe and the US with Nigeria, where the poorest in those countries earn $11 per hour, while the poorest in Nigeria have no hope of any earning?
“It is challenging for someone earning N50,000 and N70,000 per month in Nigeria to find the money to buy cooking gas in the way that the poor in the US are buying.
“Although the cooking gas market is deregulated and prices are determined by the international market rate, the justification by marketers in Nigeria is still skewed against the masses who cannot afford to buy gas.
He said, “Cooking gas is not a luxury item, and it is important that the price is affordable to protect the country against the impact of climate change and guarantee a good livelihood for the masses. The poor, who rely on cooking gas to prepare their meals, are particularly vulnerable.
“While market dynamics may be used as an excuse, the government has a responsibility to intervene on behalf of the poor and bridge the gap between the rich and the poor. Failure to do so could result in suffocating the poor while the rich ones live on.
“It is time for the government to take action and ensure that cooking gas is accessible to all Nigerians,” the NALPGAM President said.
Olatunbosun challenged Ekperikpe Epko, Minister of State Gas Resources, and other government agencies to audit the volume of cooking gas supplied to the domestic market by the Nigerian Liquified Petroleum Gas (NLNG).
He questions why other local gas producers are selling at a price equivalent to the imported product, insisting that such an act is a rip-off on innocent Nigerians.
He further challenged them to justify their claims of high prices and disclose the origin of their products.
According to him, most of the cooking gas in the market comes from local producers in Nigeria, with only a few quantities being shipped into the country.
He said, “Therefore, it is wrong for importers to use foreign exchange volatility as an excuse to inflate prices, he said.
NALPGAM challenged the importers to show the documents justifying their claims and proving that they are not selling at exorbitant prices.
Olatunbosun also alleged that some importers were selling 20 metric tons of cooking gas at N14 million after receiving the product from local producers at less than N8 million.
The NALPGAM President encouraged President Tinubu to ask the importers to reduce their greed for profiteering on cooking gas.
He said, “With the consumption of cooking gas dropping in the last year to around 700,000 metric tons per annum, many Nigerians are resorting to using charcoal, firewood, and mixing petrol with other fuel to cook.
“This has led to deforestation and environmental degradation, which could further compound Nigeria’s exposure to erosion and desert encroachment.
“The government needs to find a way to make life better for people, as buying gas is no longer affordable for many, and the only alternative will be for people to cut down trees.
He therefore called on the gas importers and off-takers to be humane to the plight of the masses, which should not be seen as an attempt to bring back subsidy, but to ensure that essential commodities are affordable to all.
He said, “Cooking gas is a product for all classes of people, including the poor, who consume only things that they can afford to cook, compared to the wealthy and middle/upper classes of people who can afford to buy processed and finished foods in the malls.
The NALPGAM President further noted that Nigeria’s consumption of cooking gas has dropped to around 700,000 metric tons per annum in the last year.
This, according to him, is significantly lower than other countries, Republic of Benin consumes more cooking gas than in Nigeria.
He mentioned that Morocco is the leading African country in terms of consumption, followed by Algeria, despite having a smaller population, adding that Nigeria, with over 200 million citizens, is struggling to consume less than 1 million metric tons per annum.
“If nothing is done urgently to ameliorate the impending crisis, the government should expect to see a surge in cutting down of trees as more people will abandon cooking gas, while deforestation surges and further compounds Nigeria’s exposure to erosion and all forms of environmental crisis, including desert encroachment,” Olatunbosun warned.
Haruna Kabiru, Sale and Relationship Manager for a leading Gas plant in Kano, also informed EnergyDay that the retail price of gas varies between N950 and N1000 per kg.
He said, “Despite the high prices, people in Kano are still buying gas as it is a preferred cooking fuel over charcoal or other means.
“The rise in gas consumption despite the hike is also due to the conversion of generators to gas makes it difficult to determine whether the people buying gas are using it for cooking or for powering generators, ” Haruna said.
He, therefore, emphasised that his gas plant sells gas at N39,500 for 50kg, which is equivalent to N790 per kg after sourcing its supply from Gas Terminal Link in Lagos.