The National Association of Liquefied Petroleum Gas Marketers (NALPGAM) has urged Nigerians to brace themselves for the reality of filling a 1-kilogram cylinder of Liquified Petroleum Gas (cooking gas) at a rate between N1,200 and N1,500.
The marketers have therefore disclosed that major suppliers, deport and terminal owners have increased 20 Metric Tonnes (20MT) of the product from around N14 million to N16 million price despite lifting at N8.3 million/20MT from Nigerian Liquified Natual Gas (NLNG).
Mr. Oladapo Olatunbosun, President, National Association of Liquefied Petroleum Gas Marketers (NALPGAM) raised this alarm during a courtesy visit to the Chairman Senate Committee on Gas, Senator Jarigbe Jarigbe in Abuja on Monday.
The President of NALPGAM has therefore called on the federal government and the National Assembly to intervene by promptly investigating what he described as a dubious increment of the commodity by major suppliers, deport and terminal owners of the industry.
Chief Oladipo emphasised that the deliberate hike in the prices of cooking gas is a tragedy that required a national urgency.
The Nigerian cooking gas market is facing a major challenge due to the unaffordability of cooking gas, which is caused by the profiteering tendencies of some individuals and groups that have formed themselves into a cabal determining prices that the product should be sold, according to Olatunbosun.
He explained that the intervention of the NALPGAM under the administration of President Mohammed Buhari led to surge in the supply by NLNG, adding that Nigeria presently produced more volume of Butane gas (LPG) when compared to the volume imported into the country.
He said, “As at today, domestic consumption of cooking gas in Nigeria is about nine hundred thousand (900) metric tonnes per annum, at maximum, while the minimum is 750,000MT/annum.
“NLNG has been consistent, but the cabal and capitalists are making it difficult for the poor masses to afford cooking gas.
“Today, 20 Metric tonnes of LPG is released by NLNG to the suppliers at a little bit about 9 million, while it is sold to us(marketers) at the rate of N16.8 million/20MT.
“The cheapest price that retailers can get is N1200 per kg. How can a student or menial worker afford to cook a pot of beans with N1200 worth of gas? This is unjustifiable considering the fact that the bulk of this product is locally sourced.
“Ghana, Ivory Coast, Benin Republic are not producers of cooking gas, yet the price of the product is much cheaper in these countries than Nigeria, which is a major producer. We produce more than we import but still the capitalists will never allow Nigerians to benefit from the effort of the government that has convinced them to guarantee steady supply of the commodity by NLNG.
“The cabal should stop justifying the increase in forex volatility. We would like to evaluate their forex exposure after obtaining the product at Naira from the NLNG.
“Forex claims have been abused, the importers have gone too far, and it has turned to exploitation. There should be justification for the hike, it is unfair to increase the price of a fuel that is locally sourced. This is just a punishment to the innocent Nigerians.
“Does NLNG supply the product to importers in US$? No. Importers and off takers are lifting the NLNG product in Naira. They get it for around N9 million and dispense the same product at N16 million, with the intention of blackmailing the administration of President Bola Tinubu.”
Oladapo emphasised that the incessant hike in the price of cooking gas is exposing millions of Nigerians to untold hardship daily.
He said, “What is the implication of price hike on effort by the government to enhance the country’s gas utilization?
“Morocco has the largest utilization level in Africa, today that country’s gas deposit is not up to the volume of what Nigeria has. Nigeria, a country with the second largest gas reserve in Africa and the ninth in the world, yet our people cannot afford to cook with gas.
“If this manipulation is not eliminated before the end of 2023, cooking gas will be a luxury to the extent that only the wealthy Nigerians and upper class of people in our society will be able to cook. The masses will therefore hit the forest reserves and cut down trees. The market for charcoal will rise.
“This would lead to deforestation, constitute environmental and health challenges.
Olatunbosun confirmed that the NLNG has not increased the price of its supply over the last few days, but the importers have chosen to. The importers are smiling to the bank at the expense of the poor. This is an attempt to put the administration of President Bola Tinubu in trouble.
“If this is not addressed even the Compressed Natural Gas(autogas) being championed by the government would be very expensive for users. This is the same attitude that frustrated the country’s attempt to own a refinery.
“Every week these people are making millions of Naira, and unfortunately the masses are not speaking up,” the NALPGAM President said.
Olatunbosun stated that the hike in prices of cooking gas and other petroleum products is sending very negative notes to Nigerians about the present administration amidst economic crises. It looks like Nigerians have been neglected and dejected due to the activities of few individuals truncating the efforts of the government.
The NALPGAM President alleged that the roles of the regulators in customers protection and price monitoring is lackadaisical, stressing the need for concerned stakeholders to rise to the occasion and protect Nigerians against the level of hardship.
He said, “Of course there are agencies of government that are supposed to see through and ensure that the poor and voiceless are protected, perhaps those agencies are not doing their work because one will ask a question, is NLNG not aware how much gas is sold?
What is the Nigerian Midstream and Downstream Petroleum Authority (NMDPRA) doing? Are they not in Nigeria? Did they not know the current price? The data information is available everywhere, but who is representing the interest of the voiceless Nigerians? Who caters for the poor? Nobody but the few are smiling at the bank every day.”
Chief Olatunbosun further alleged Rain Oil, a major importer as one of the perpetrators. He cautioned that NALPGAM is not against investors making profit but warned that the pricing should be reasonable.
“As of today, Rain Oil is selling at N16.8 million for 20 metric tonnes, although the purpose of investment is to make profit and I am not against that because they invested, but making super profit is discouraged and illegal in different parts of the world.
“The landing cost of the product is N8.7 million/20MT. NLNG sold to these cabals at N548 and NLNG that processed the commodity is not making up to 100% profit margin.
“It is not out of place to make reasonable profit, because there is another component of investment that needs to be recouped but it becomes abnormal for these firms to start making SUPER profit at the expense of the masses.” Olatunbosun stressed.
The President of NALPGAM emphasised that the Association is resolute and committed to the course of affordability and availability and is not ready to back out.
He said, “I have been threatened severally for challenging these bandwagons in the industry. Nothing is going to stop us from exposing the rot in the system, until the price is fixed at the rate that the general public can afford.
“They have sent a lot of threat messages to me. They have threatened my business, but I believe the God of the people that I am speaking on behalf will protect me. If you know you want to import gas, don’t take cooking gas from NLNG, it is the product of the masses. What is the point of taking the commodity from NLNG and selling the same product at a high rate?
“Two vessels of cooking gas belonging to the NLNG have just discharged their products in Port Harcourt, yet these dealers have stopped collecting money from gas marketers. They have stopped selling to our members.
Olatunbosun therefore charged the Chairman, Senate Committee on Gas to ensure that the issue is heard at the plenary as a matter of national urgency by bringing all the parties involved to the table to give account of their transaction.
“The Committee on Gas should probe the activities of the players. Do not invite only them, as they will give a fake breakdown of their transaction. We have insider knowledge. We are ready to confront them.
“We are not gathering rumours, let them come with their pricing template and operational costs. What is the amount they paid to NLNG? What is their overhead cost? What is the right profit margin? Why is gas cheaper in Cotonou than Nigeria? No Ghanaian will buy a kg of gas for 1000 cedis, today Nigerians are buying a kg of gas for N1200,” Olatunbosun emphasised.
Senator Jarigbe Jarigbe, Senate Committee Chairman on Gas, while responding to the outcry of the gas marketers stated that the terminal owners selling gas products at a lugubrious rate is a concern that would be addressed by the Senate.
“He said,” The allegation that NLNG sells to the terminal owners at about N9million/20MT, with a profit margin of about N7 million/20MT would be investigated by the Senate.
“We are aware of the negative effects of SUPER profit on the value chain and to the end users. The Senate under the leadership of Senator Godwill Akpabio will not agree with this. I am sure that he would not like to hear this.
Senator Jarigbe further assured NALPGAM that the Senate would act on the demand of the association in respect of climate change and also ensure that the cooking gas is available at a reasonable rate to all Nigerians.
“We will do more than what you have done, because we are here to represent our people, there is no one that is not using gas except from those in the villages.
The Chairman Senate Committee on Gas therefore promised NALPGAM of the commitment of the Committee to match words with actions.’