A Review of the Nigerian Energy Industry

Marketers, firm on collision course over high cost of cooking gas

17 September 2014, Lagos – Marketers of Liquefied Petroleum Gas (LPG) otherwise known as cooking gas, under the aegis of Nigerian Association of LPG Markters (NALPGAM) and ALGASCO LPG Services Limited are heading on a collision over the recent increase in the price of the product at the Apapa gas terminal of Navgas.

ALGASCO markets LPG at its Creek Road terminal in Apapa, Lagos, which is operated by Navgas.

cooking gasThe marketers are protesting against what they called “the sudden increase of LPG price” by the company, even as the Mont Belvieu LPG price, which is the international pricing model used by the Nigeria Liquefied Natural Gas (NLNG) Limited to sell gas to the domestic market has not increased  it price.

In a letter addressed to the Managing Director of ALGASCO LPG Services Limited, which was obtained by THISDAY, the Executive Secretary of NALPGAM, Mr. Makinwa Omoyemi, reminded the company that though LPG was a deregulated product, the price of crude oil, which is also one of the parameters used by NLNG to determine the domestic price of gas, is even falling.

“Due to the sudden price increase, our members nationwide demand further explanation as to what led to it. We therefore, advise that the status quo remains in respect of the product price,” he said.

Some of the marketers alleged that ALGASCO increased the price from N3.3 million per 20 metric tonnes (one LPG truck) to N3.5 million within one week, translating to an increase of the 12kg cylinder from N2, 700 to N3,000 at the LPG plants.

But in a swift reaction, a source at the company, who spoke on condition of anonymity, told THISDAY that the company was not responsible for the increase in the cost of LPG.

He stated that the Mont Belvieu LPG price at the international market had increased from $563 per metric tonne on September 1 to $576 as at September 15.
“Please ask the NLNG what Mont Belvieu has done between September 1 and 15. Mont Belvieu has increased gas price as at September 1, without premium from $563 per 20 metric tonnes to $576 as at September 15, being Monday. Price quote has not come out.

So, the marketers have no basis for what they are saying because we are not the one that increased the price.  Six companies received 12,000 metric tonnes when it was discharged by the vessel, GAZ Povidence, which was sent by the NLNG and all the companies are selling at N3.5 million. Why are they pointing at us as the only company selling at that price? They have never seen the contract between us and the NLNG. So, they have no basis to do all these things,” he explained.

He blamed the action of the marketers on “competitors, who use different methods to market themselves.”

“Nobody had product in August; we were the only company given



– This Day

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