Marketers of Liquefied Petroleum Gas, otherwise known as cooking gas, have warned that the 12.5kg of cooking gas, which currently sells between N7, 500 and N8, 000 might increase to N10, 000 before December if the current crisis in the sector is not addressed.
The marketers have expressed concerns over the supply shortage which is rocking the sector and has led to recent series of increases in the price of the commodity. The rise in prices of gas has driven more Nigerians to seek alternative sources of fuel like charcoal, firewood, sawdust, among other energy sources whose prices have started rising as well.
This was disclosed by the Executive Secretary of the National Association of LPG Marketers (NALPGAM), Mr Bassey Essien, during the weekly e-discourse organised by a leading Pan-African forum, Platforms Africa, according to a statement on Saturday by the organisation’s Team Lead, Adeola Yusuf, according to Punch.
What the Executive Secretary of NALPGAM is saying
Essien insisted that the Federal Government needed to review the recently introduced import charges and Value Added Tax or else, the price of cooking gas may as well get to N10, 000 for a 12.5kg cylinder.
Essien said, “Today (Saturday), the price has risen to N7, 500 and N8, 000. The skyrocketing price of gas is our fear and what we are trying to avoid. Early in the year a 20-metric ton of gas was selling for below N5m but today, the same tonnage sells for N10.2m. As long as there is that supply shortage, the available quantity and the dynamics of supply-demand will keep pushing the price higher.”
Lamenting poor patronage of NALPGAM by customers due to the high price, Essien said the association was concerned that more Nigerians were being forced to return to coal, sawdust, kerosene, and other dirty fuel as “the price of the cooking gas has suddenly gone up.”
The NALPGAM Secretary said despite the current challenges, the association was discussing with the government, stakeholders, producers and importers to see how the situation could be addressed in addition to trying to persuade marketers not to take advantage of the crisis to inflict more pains on citizens by increasing the cost of gas in their locations though they are equally expending huge cost to have cooking gas at their locations.
NALPGAM secretary also expressed worry over the gradual rise in the cost of cylinders over the years, maintaining that all the raw materials used by the two cylinder manufacturing plants in the country were imported.
He said despite Nigeria’s over 180 million population, the country barely had up to 10 million cylinders in circulation amid substandard cylinders in circulation.
He said, “The cylinder ownership structure in the country ensures that owners are in charge of their cylinders. Cylinders expire on the 15th year of usage from the manufacturing date. Because of the high replacement cost, consumers buy what they can afford. This has equally encouraged the proliferation of substandard cylinders in circulation. The regulators are working hard to monitor the standard of cylinders coming into the country.
“The progress in cylinder acquisition still needs government input to ensure that the cost of materials for cylinder production get the necessary exemption from duties but however the state of our local currency still remains a major problem.”
What you should know
Nairametrics earlier reported that the cost of filling a 12.5kg cylinder of cooking gas has increased from an average of N6,200 in July 2021 to N7,000 as of September 2021.
Energy experts had expressed concerns over Nigeria’s inability to deepen the penetration and utilization of LPG in the country despite theoretically being in a position to produce sufficient LPG to meet local demand.
Recall that in September, oil marketers under the aegis of Major Oil Marketers Association of Nigeria (MOMAN), protested the Federal Government’s reintroduction of Value Added Tax (VAT) on imported LPG.
They argued that the introduction of VAT to the already high price of gas which is largely imported due to global gas crisis will negate the government’s policy on the adoption of LPG.
The association, who are major stakeholders in the downstream sector of the oil industry asked the federal government to rescind its decision by removing the 7.5% VAT on the product, warning that the fee will hamper the adoption of gas in the country and create a barrier to the objectives of the ‘Decade of Gas’ agenda of government.