Social Security Fund

*As rising demand puts pressure on prices

By Obas Esiedesa & Ediri Ejoh

THE supply of Liquefied Petroleum Gas, LPG, has increased to 740,675.72metric tonnes, MT, in the first eight months (January-August) of 2021, from 675,814.72 MT, recorded in the corresponding period of 2020, indicating an increase of 9.6 per cent.

Data obtained by Energy Vanguard from the Petroleum Products Pricing Regulatory Agency, PPPRA, also showed that despite having one of the world’s largest gas reserves and leading exporter of Liquefied Natural Gas, the bulk of LPG consumed in Nigeria are imported from abroad, due mainly to increasing demand.

According to the latest data, in August 2021, 55.4 per cent of the 85,264.803MT supplied nationwide was imported from the USA, Algeria and Equatorial Guinea, while 44.6 per cent came locally.

Rising price hampers FG Decade of Gas policy

The Federal Government’s plan to increase the usage of gas as the energy of choice among Nigerians is facing severe challenge, with rising price of the product across the country.

The price of a 12.5kg cylinder of cooking gas, which sold for N4,000 at the beginning of the year, has risen to N6,700 as at last week.

The government had, in March this year, declared 2021 to 2030 as Nigeria’s decade of gas, with the target of having the economy powered entirely by gas.

With the rising price, however, experts are predicting decline in consumption, as consumers move to alternative energy as cooking fuel.

Experts view

The Nigeria Association of liquefied Petroleum Gas Marketers, NALPGAM, in a statement released to Energy Vanguard, responding to the continuous spike in the price of cooking gas, hinted that despite several engagements and appeals made to the relevant agencies of government for urgent action to mitigate the cost on marketers, a 12.5kg cylinder of gas may go for N10,000.

The association, through its General Secretary, Mr. Bassey Essien, said: “It is worrisome that despite the abundance of gas reserve in Nigeria, the level of cooking gas produced for local consumption is low and can’t meet the 1.2 metric tonnes consumption size.

“The issue has always been that 35 per cent to 45 per cent of what is being consumed locally is supplied by the Nigeria Liquefied Natural Gas, NLNG, while 65 per cent to 55 per cent is sourced through importation.

“Multiplying this impact is the reintroduction of value added tax, VAT, on importation of the cooking gas. A particular agency of government just approached the Ministry of Finance and the Federal Inland Revenue to disregard the 2018 gazette for gas importation, because it wants to show that it is performing.

“This would be a major setback for the Federal Government’s ‘Decade of Gas 2020-2030’ vision. What capacity has been put in place to improve on domestic production? Till date, 70 per cent of the local consumption comes from importation. This is like a step forward and two steps backward.”

The NALPGAM Secretary stated that effort towards gas expansion initiatives of the government has been stifled by policy and regulatory inconsistencies.

“Another major issue is the foreign exchange being sourced for the importation of the product. While government and CBN have refused to offer a forex window for importers, the cost of accessing dollar in the local market is then passed on to end users.

“It is also pertinent to note that the locally sourced LPG is denominated in dollars to the marketers. It is sold to them at the international prices, despite being produced at home. There is no justification for benchmarking NLG produced locally in dollars.

READ ALSO: Energy Transition: Oil, gas to remain relevant in Nigeria, other nations — Experts

“One major issue is that while NLNG is doing so much to fill supply for domestic consumption at around 35 per cent, other indigenous gas producers are not selling to the local marketers. We need government policy to mandate local gas producers to sell to local buyers, before considering exporting the gas to other countries,” he said.

Similarly, the new chairman of Major Oil Marketers Association of Nigeria, MOMAN, Mr. Olumide Adeosun, has called for the discontinuation of VAT on imported Liquefied Petroleum Gas, insisting it would hamper the adoption of the fuel in the country.

While commenting on the hike of cooking gas price in the country, he said: “Unfortunately, we still don’t produce sufficient domestic LPG, so we are having to do a lot of imports and we are seeing a spike globally in the price of LPG. Domestically, what can we do? I think there have been discussions around the VAT that has been levied on the product.

“I think one of the big discussions that is going on right now is how VAT can be eliminated, because the tax naturally creates a barrier to the objectives of the ‘Decade of Gas’, which is to increase the penetration and adoption of LPG, among other things, as an alternative to biomass. So, we are hoping that some headway is being made in that direction.”

It is strange that Government helps to grow and develop medical practice, but catalyse the resolve of physicians imposed on the health system to stifle and stagnate the growth potentials of other health professionals and workers.

Today as it stands sensitisation by the ACPN has ensured that over 75 percent of Community Pharmacists have undertaken international certification courses in Vaccination.

This is a tragic waste of this valuable human resource.

He called for the reorganisation in agencies like the Primary Healthcare Agency, NHIS and others to ensure that critical care staffers at Community level are not neglected.

Community Pharmacists are the closest to the health seeking population globally because they are only professionals who don’t charge a professional fee for providing services.

Nigeria must open the barriers of restrictions in its health system to encourage a 7-Star rendition of services by all Health workers especially the professionals in their ranks.

Vanguard News Nigeria

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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.