Experts in natural gas have attributed the rise in prices of Liquified Petroleum Gas otherwise known as cooking gas to rising international prices, high tax rates, forex scarcity as well as surge in demand.
Since the removal of fuel subsidies, and fresh emphasis on gas as an alternative to power generators and vehicles, the price of the commodity has skyrocketed.
In some areas in Lagos, it has risen to as high as N1000 per kilogram from the N600 it sold a few months back. Retailers in Iyana Ipaja and Agege areas of Lagos now refill 12.5kg for as high as N11,000 and N12,500 depending on the vendor.
An industry expert in Lagos Abraham Adekunle, added that low investments in natural gas exploration in the country resulting in low production is also another factor responsible for the hike.
“As everyone knows, if there is low production of a highly demanded product, the price will skyrocket,” said Adekunle.
He emphasized that the insufficiency in gas exploration investments and the pervasive issue of crude oil theft, which directly affects associated gas production, have steered the nation’s attention towards seeking an alternative solution—importing Liquefied Petroleum Gas (LPG).
According to him, despite Nigeria Liquefied Natural Gas (NLNG) Limited committing to supplying LPG to the country under the domestic liquefied petroleum gas (DLPG) scheme, there has been a noticeable decline in gas supply volumes to the company in recent times.
“This decrease in supply can be attributed to various factors within the purview of operators, ultimately hindering the company from producing an adequate volume of gas.
“Some of these factors are aging facilities, vandalism acts, and above all, the low appetite of operators to accelerate investments in the sector because upcoming and more profitable oil and gas producers have emerged elsewhere on the continent.”
The natural gas expert also stated that the country is not able to meet its goals on liquefied petroleum gas (cooking gas) availability not just because it cannot attract real investments in the sub-sector but because of the government’s inability to follow through on policies.
Also reacting, President of the Nigerian Association of Liquefied Petroleum Gas Marketers, Olatunbosun Oladapo, cited rising international prices, high tax rates and prices of vessels, forex scarcity, and naira devaluation as some of the reasons for the price hike.
“The situation is very unfortunate because prices are going higher. Nigerian consumers are passing through very difficult times because they can no longer afford gas,” he added.
“Local taxes are worsening the problem,” he said, calling on marketers who had the opportunity to buy products locally to fix prices with “consumers’ sympathy” in mind.
