Cooking Gas Taking A Toll On Nigerians

Cooking Gas Taking A Toll On Nigerians
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Nigerians are confronted with a myriad of crises even as domestic matters are taking a toll on many citizens. While there are stringent measures to curtail environmental degradation on paper, actions across many governmental agencies have not given a pointer that we are yet ready to deal with the gross lapses that have enveloped the nation’s volatile desecration of the environment.

The government has vehemently pursued a policy that would make gas the first choice for households by promoting a conscious gas policy, where users would be incentivized to use gas in order to gain consciousness in that regard. While the policy is still being appreciated by hapless citizens, the price of cooking gas has skyrocketed from N3500 to N8000 per 12.5 kg, making over 100% rises. Nigerians have never been so overwhelmed by this kind aggravated increase in any way. Not a few Nigerians are worried by this sudden increase when it was expected that the cost of cooking gas would go down.

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That was a time when it was touted that gas was being flared at very substantial cost to Nigerians. At that time, many envisaged that gas could have been given to them handy for domestic use. Meanwhile, we get confronted with intricacies over why gas is the best option for households. The long-overdue concern to embrace gas has taken a toll on stakeholders who are yet to come to terms with the increasing cost of cooking gas.

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Recently, the Federal Government approved the new National Gas Policy. The new Gas Policy’s main objective is to transform Nigeria from a crude oil export-based economy to an attractive oil and gas-based industrial economy.

It is also meant to extend gas penetration in the domestic market in order to facilitate the growth of the electric power, agricultural, industrial and transportation sectors.

The power sector, for example, relies on gas to generate electricity. It is also meant to help gain a presence for Nigerian gas in international markets.

Nigeria is said to have the world’s ninth largest proven gas reserves, at 187 trillion cubic feet.

A revised policy that is focused on pivoting to a gas based economy could increase Nigeria’s foreign exchange earnings which currently rely mainly on crude oil exports.

With a new Gas policy, the incessant epileptic power supply, mostly caused by cut in gas supply to power generating companies could reduce drastically. This will ensure that power generation is at least steady, giving more generators the incentives to generate more power to the grid.

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It could also help improve investments in fertilizer based manufacturing, gas based transportation etc.

With this new policy, Nigeria now has a third tier sector in its Oil and Gas setup. Upstream is for crude oil, downstream which is for oil marketing and refining, and then midstream which is for gas.

The policy  is also aimed at dividing the Nigeria Gas Company into separate transport and gas marketing companies and introducing market-led wholesale gas pricing after a transitional period.

According to the policy, domestic gas prices, which had been a thorny issue for gas producers, will now be priced at the average export market price less the costs of re-gasification, shipping and liquefaction.

This pricing will remain in the transition period before morphing into a pricing determined solely by the market.

The policy also requires that upstream licenses will now include a condition to provide gas to the domestic market subject to the limit of their obligation.

According to the report, even against subsidised kerosene a consumer of kerosene will spend N130 per litre for fuel compared with N89 the same consumer will spend on unsubsidized LPG. As such, a gas policy to provide an enabling environment for increased domestic gas usage will increase demand and provide a greater economies of scale, which will further reduce the price of LPG.

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Despite these obvious benefits, LPG usage in Nigeria is low as about 30 million households still rely on firewood to cook. Reasons cited are high cost of buying cooking gas equipment such as cylinders, cookers etc.

The initial cost of acquiring a LPG cooking pack (cylinders, stoves, regulators etc.) as compared to other fuels is higher. Not only are the LPG cylinders specialised, but they are also subjected to import taxes even though domestic production capacity is presently limited.

Also, VAT is levied on domestic production of LPG and LPG cylinders but not on imported cylinders.

The policy is targeted at ensuring that introducing a tax policy that ensures the cooking gas market is not put at a disadvantage.

AljazirahNigeria calls on stakeholders to brace up on the salient issues raised  and bring an end to the embarrassing scenarios being generated.

Gas is expectedly a close companion that should be available to all and sundry at minimal cost.

Aljazirahnews


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