Cooking Gas: Availability, Cost Still Issues

Cooking Gas: Availability, Cost Still Issues

It is of concern that domestic price for Liquefied Petroleum Gas, LPG, also locally called cooking gas has become an issue to numerous users of the product notwithstanding that it is a by-product of oil which we naturally have in large supply.

Recent reports indicate that more consumers have lately either reduced consumption or ditched the commodity for cheaper alternatives such as coal and firewood given the rising cost and sometimes unavailability.

President, Nigerian Gas Association, Ed Ubong, said during an event in Lagos recently put current national annual consumption at between 1.3mn and 1.5mn metric tons from the Federal Government’s annual target of 5mn metric tons.

Despite repeated assurances by the Federal Government that it is pursuing a National Gas Expansion Programme which seeks to deepen local gas usage within the next decade, this ambitious effort is still not looking up.Executive Secretary, Nigerian Association of Liquefied Petroleum Gas Marketers, NALPGAM, Bassey Essien, reported that the drop in consumption rate was due to increasing prices.

According to him, the price of 20 metric tons of cooking gas shot up from N12mn to N12.8mn recently.
“Prices have been volatile for a while, and it’s because the purchasing power has dropped. Gas is no longer affordable, and buyers are either regulating use or found alternatives. As at today, a 20-metric-ton of gas sells for about N12.8mn.

Price has hovered around 10mn-12mn before now. Just imagine what we bought last for N12mn rising by N800, 000 for one truck”, he was quoted.

Some Nigerians have expressed concern over the dwindling purchasing power of average Nigerians, thus stifling their crave for gas which is cleaner and more sustainable, given that it is a residual component from our large resource of oil.

Some stakeholders believe that lack of government policy to drive demand also formed part of the reason for the situation. Others whose position appears implausible blame the situation on the Russia-Ukraine war which has crippled supply of gas to international consumers.

We are averse to the situation where between 55-60% of gas utilised in Nigeria is currently being imported by independent marketers, while the Nigerian Liquefied Natural Gas Limited, NLNG, supplies just 40%. The government must do the needful to reverse that trend by energizing the various segments in the value chain to make gas a residual product from oil available at reasonable cost.

If we have been described as a gas producing country with approximately 207 trillion cubic feet ,Tcf, of proven gas reserves, ranking 9th in the world and accounting for about 3% of the world’s total natural gas reserves of 6,923 Tcf, it is then unthinkable that we are in short supply of same back here.

Natural gas is estimated as the fastest growing fossil fuel in the world, and is projected to overtake coal by 2030, as the second largest source of energy.

The Federal Government said in April, that the value of Nigeria’s proven gas reserves of about 206.53 trillion cubic feet was over $803.4trn.

We align with stakeholders who insist that we need to deepen domestic production of gas to bring down prices and increase local consumption, as affordability is an issue here.
It is natural that if we import the product, the international pricing will also apply because freight charges and import duty would further hike the price.

The National Bureau of Statistics, NBS, said in its latest report that the average price for refilling a 5kg cylinder of cooking gas stood at N3800 in April 2022, from N3778 recorded in March 2022, showing an increase of 0.59% month-on-month.

However, on a year-on-year basis, the average retail price for the product increased by 83.67% from N2069 in April 2021.

Similarly, on a year-on-year basis, the average retail price for refilling a 12.5kg cooking gas increased by 89% from N4318 in April 2021.

The state comparisons showed that the highest average retail price for the refilling of a 12.5kg cylinder of cooking gas was recorded in Oyo with N8931, followed by Bayelsa with N8917, and Ogun with N8767. Conversely, the lowest average price for the refilling of a 12.5kg cylinder of the product was recorded In Yobe with N6619, followed by Borno and Ebonyi with N6800 and N7711 respectively.

The average retail price of a 12.5kg cylinder of the product by zones showed that the average retail price was highest in the South-west with N8573, followed by the South-south and Southeast with N8253 and N8240 respectively.

The North-east zone recorded the lowest price with N7559. However, all the foregoing data have been overtaken by events as 12.5 kg sells within the average N9 to N10K across the country.

The nation must think out of the box to reverse this trend, particularly that we have the reserve in abundance.

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