By Prince Okafor
THE price of Liquefied Natural Gas, LPG, popularly known as cooking gas has risen by 25 percent between January and May 2022 in many parts of the nation.
A market survey by Energy Vanguard showed that the 12 kilogramme, kg, which price stood at N7, 500 in January has increased to N10, 500 in Lagos, Abuja, and other cities. The development has compelled many households to switch to other options, especially charcoal and kerosene.
In an interview with Energy Vanguard, the National Chairman, Liquefied Petroleum Gas Retailers, LPGAR, branch of National Union of Petroleum and Natural Gas Workers, NUPENG, Mr. Michael Umudu, said that the situation was, indeed, worrisome for both retailers and consumers.
He stated that the FOREX allocation from the Nigerian LNG Ltd. to marketers could only meet about 40 per cent of the consumption in the country, adding that prices at the depots have similarly risen to about N12.6 million for 20 metric tonnes, from N11.4 million, which was the average price a few weeks ago.
Umudu said: “The worrisome aspect of this development is that it has continued to rise on daily basis for weeks now but began to escalate in the last few weeks leading to significant increases in both depots and retail outlets. For us as retailers, it is a big problem because we can’t even afford to stock up our shops and even when we do, it will take time before we can make enough sales to get back our investments. What we find now is that people even bring in 12.5kg cylinders but opt to fill them with less than 6kg of gas just to manage at home.”
He said the union expected the government to come up with clear policy direction for the development of LPG in the country to forestall the ugly situation, stressing; “LPG as a clean energy has steadily been embraced by low income earning Nigerians in the last seven years against previous years when it was seen as the preserve of the rich. What we are witnessing now is that demand for LPG is reducing drastically because people can no longer afford the product and are resorting to firewood and kerosene stoves which have health implications.”
Reacting to the development, the General Manager, External Relations and Sustainable Development, NLNG, Mr. Andy Odeh, noted that the company supplied about 400,000MT of LPG to the domestic market in 2021. He said the board approved the supply of 450,000MT, 100 per cent of the company’s LPG production (Propane and Butane), to the domestic market in 2022, adding that this marked the company’s strong commitment to the continued growth of the domestic LPG market.
Managing Director, Techno Gas Ltd, Mrs. Nkechi Obi, said the Federal Government should intervene in the rising price of the product across the country, noting that the domestic consumption of cooking gas, had risen to about 1.2 million metric tonnes per annum.
She said: “Nigeria’s target was to attain five million mtpa in the next few years. This objective is being threatened by the rising cost of cooking gas in the country as over 60 per cent of the product was being imported by marketers. Several factors including international gas pricing, access to forex, import duties, freight charges and other costs affect the final price of gas in the market. This development has affected the domestic demand for cooking gas.”
Meanwhile, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, in its March 2022 LPG-Propane-LNG Supplies report noted that a total of 61,884.291 metric tonnes (MT) of cooking gas was imported in the month of March. This, according to the authority, indicated that the total gas import rose by 107.61 per cent from the 29,807.591 MT imported in February. The report noted that the 61,884.291 MT cooking gas import, represented 47.9 per cent of the total cooking gas supplied in the country in the month under review. In terms of destinations, there were no changes as the United States of America and Argentina topped the suppliers of the commodity to Nigeria. They also topped in the previous month.
NMDPRA noted that five companies – Algasco LPG Services Limited, Prudent Energy and Services Limited, Rainoil Limited, NIPCO and Techno Oil Limited – were responsible for Nigeria’s total cooking gas import in March 2022. The report revealed that in March Algasco imported 22,389.781 MT of LPG from the US; Prudent Energy imported two consignments of LPG from the US, comprising 4,020.031 MT and 4,177.380 MT, while Rainoil brought in 7,512.035 MT of the commodity from Argentina.
In addition, NIPCO and Techno imported 12,129.213 MT and 11,665.851 MT, respectively, from the USA.
Meanwhile, the National Bureau of Statistics in its latest report on LPG Price Watch, stated that the average price for refilling a 5kg cylinder of cooking gas stood at N3800.47 in April 2022 from N3778.30 recorded in March 2022 showing an increase of 0.59 percent month-on-month.
However, on a year-on-year basis, the average retail price for Cooking Gas increased by 83.67 percent from N2069.21 in April 2021.
According to analysis, the highest average price for refilling a 5kg Cylinder of Liquefied Petroleum Gas (Cooking Gas) was recorded in Gombe with N4337.50, followed by Bayelsa with N4250.00 and Adamawa with N4220.00. On the other hand, Yobe recorded the lowest average price with N2931.83 this was followed by Sokoto and Zamfara with N3000.00 and N3250.00 respectively.
In addition, prices analyzed by zones show that the average retail price for refilling a 5kg Cylinder of Liquefied Petroleum Gas (Cooking Gas) was highest in the South-East with N4041.39 followed by the South-South with N3896.59 and North-Central with N3835.83, while the North-west recorded the lowest average retail price of N3572.83.
The average price for refilling a 12.5kg Cylinder of Liquefied Petroleum Gas (Cooking Gas) increased to N8164.37 in April 2022 from N7617.71 in March 2022 representing a 7.18 percent month-on-month increase.