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Nigerians to pay more for cooking gas

By Sebastine Obasi

Nigerians will be compelled to pay a sudden 48 percent price increase for liquefied petroleum gas, LPG, also known as cooking gas, as a 12.5 kilogramme of the product has risen to N4,000, up from N2,700 previously.

Gas-energyThis is even as the development has also set the marketers, under the aegis of the Nigerian Association of LPG Marketers, NALPGAM, and ALGASCO LPG Services Limited on a collision course over the arbitrary increase.

NALPGAM President, Mr. Basil Ogbuanu, alleged that ALGASCO, operator of the Apapa gas terminal of Navgas, increased LPG price without justification. He also accused the company of ordering other off-takers, who use its terminal not to sell to marketers at a certain price.

The marketers are therefore protesting against what they call, “the sudden increase of LPG price” by the company. They noted that the Mont Belvieu LPG price, which is the international pricing model used by the Nigeria LNG Limited, NLNG, to sell gas to the domestic market has not increased  its price.

According to Ogbuanu, ALGASCO increased the price of LPG from N3.3 million to N3.5 million for 20 metric tonnes, even when the international price had not increased.

“Before ALGASCO’s current price increase, the price of LPG was N3.3 million for 20 metric tonnes. Now, it is the only terminal in Lagos that has gas, out of the three terminals that we have here. Because of that, it increased the price from N3.3 million to N3.5 million.

“We, the marketers, quickly wrote a letter to the company, asking why the price went up from N3.3 million to N3.5 million for 20 metric tonnes of LPG

“Also, we demanded that the company should reverse the price to N3.3 million and up till now, the company has refused to do that. Instead of that, ALGASCO has continued to sell LPG at N3.5 million for 20 metric tonnes because it is the only terminal that has gas.

In their letter of protest signed by the Executive Secretary, Mrs. Makinwa Omoyemi, NALPGAM stated: “Presently, the price of crude oil is reducing and this is one of the parameters used in fixing the price of LPG by Nigeria LNG Limited. We therefore see no justification as to the sudden increase, which we believe will have an adverse effect on the LPG consumption across the country.

“We acknowledge the fact that the LPG market is deregulated. However, further investigation revealed that Mont Belvieu LPG has not increased, which implies price of LPG has not been increased by Nigeria LNG Limited, who is the major supplier of the product.

“Due to the sudden price increase, our members nationwide demand further explanation as to what led to it. We, therefore, advise that the status quo remains in respect of the product price.”

NALPGAM also said that this is not the first time ALGASCO would effect such price increases, saying, “In December, 2004, the company did the same thing. Because it was the only company that had gas, ALGASCO sold gas from N3.2 million to N4.7 million per 20 metric tonnes of LPG. But immediately other off-takers received gas from NLNG, they reversed the price from N3.2 million.

When contacted, a representative of ALGASCO, who chose to be anonymous because he was not authorised to speak, said that the claims are baseless.

He said, “The claims are baseless. It is totally wrong. It is unfounded. LPG is deregulated. It is open for everybody. The whole drama is not a new thing to us.”

According to him, seven companies, following documentary instruction sent to the supplier (NLNG) for current delivery are selling at N3.5m, but only a single company, ALGASCO, has been singled out as increasing domestic LPG prices. “This obviously suggests foul play,” he added.

He listed the receiving companies at the NAVGAS terminal to include, Gasland (500MT), Oando (1,500MT), Algasco (4,800MT), Banner Gas (200MT), Chimons Gas (200MT), Gas Terminalling (200MT), Hyson (600MT), and Techno Gas (300MT).


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