*Marketers halt importation
*Price hits above N10, 000 since October
Lagos — Nigeria will experience cooking gas scarcity come yuletide if all indications remain as they were, SweetcrudeReports findings have shown.
This is because importers of Liquefied Petroleum Gas, popularly known as cooking gas, have stopped importing the commodity as prices skyrockets- landing costs have shot up.
Prevailing market situation across the country shows that prices of the commodity have shut up from N3500 per 12.5kg cylinder sold last December/January, to above N10, 000 since October, validating earlier warning by marketers, and plea for the federal government to stem the tide before the situation got out of hand.
Preliminary report as of Tuesday morning, says highest price per 12.5kg cylinder is N10, 200.
The Nigerian Liquefied Natural Gas Limited, NLNG supplies just 40 percent of market share, while marketers fill the gap with 60 percent importation.
As it stands, however, the country could be thrown into disarray as marketers that supply the largest gas to the market, have since stopped importation, further creating scarcity and higher prices.
Bassey Essien, Executive Secretary, Nigerian Association of Liquefied Petroleum Gas Marketers, on Monday said the cause of halt in importation, and price increment was due to the reintroduction of customs duty and Value Added Tax on imported LPG.
According to him, if the halt in LPG imports should drag further, the supply of the commodity domestically could suffer severe hitch.
This came as NALPGAM in an open letter to the Minister of State for Petroleum Resources, Chief Timipre Sylva, urged the minister to urgently intervene in the skyrocketing price of LPG in Nigeria.
The open letter was signed by the National President, NALPGAM, Olatunbosun Oladapo, and Essien. NALPGAM is the umbrella body of operators of LPG bottling plants licensed by the statutorily empowered government agencies to carry out the business of safe bottling of cooking gas.
Essien stated that due to the fears expressed by importers who had stopped importation of LPG into the country, cooking gas sourced from the Nigeria Liquefied Natural Gas company was now selling in the region of N11m per 20 metric tonnes truck.
This, he said, was with a cumulative daily increase of N300,000 to N500,000 per 20MT truck without the imposition of VAT and customs duties.
Providing further explanation on this, Essien said, “The NLNG supplies LPG to the terminals and these terminals sell to the marketers and at times in a day, the price can go up by about three times.
“Take for example, I was granting an interview on Saturday morning on this same issue and that morning some terminals were selling for N11.6m to N11.7m, but as I stepped out of the interview, it had increased to N12m.
“And the annoying part is that since about a week or two now, nobody has been importing gas because of the issues with customs and VAT. And this is because since the position on these issues have not been clearly stated, importers have to pause.”
He added, “The customs is even clamping down on importers and so they cannot import anything, which means that the product in circulation across the country is from the NLNG.
“But when there are issues like this, some unscrupulous people will want to capitalise on the situation, which they are doing, because right now, from what we’ve got, the price at which NLNG product gets to Lagos is about N7m, but you get it at N11m and above.”
On the price increase, the association stated that despite the decade of gas policy and measures by government, the cost of cooking gas had continued to rise.
It said, “Despite the strategies employed by the government with its anticipated benefits, the reverse seems to be the case with the bulk of LPG consumed in the country largely imported.
“The availability of the product for domestic consumption has been skewed majorly to 65 per cent import dependence while only 35 per cent has been attributed to local supply.
“The obvious devaluation of the local currency, inability to access foreign exchange by importers, the increasing international price against which the cost of domestic LPG is indexed as well as the anticipated re-imposition of VAT and customs duties with retrospective application have all contrived to push the price of LPG upward.”
NALPGAM added, “It has been observed that the above factors have seriously increased the price of gas to the extent that a 12.5kg gas which sold for N3,000.00 in January, 2021, now sells for between N10,000 to N10,200, depending on area of the country.
“The daily galloping price of gas if not properly handled may derail the lofty ideals of the gas expansion plans of the government as well as the job opportunities the programmes were intended to create.”
The association stated that the cost of 20MT of LPG as of January 2020 was N3.4m, but by December 2020, it had gone up to N5.4m; N5.6m in January, 2021, N6m in February, 2021 and N11m in October, 2021 without any signs of abatement.
While the federal government had introduced the National Gas Expansion Programme, NGEP in 2020 to increase gas usage, Sylva had in August this year, described LPG as a deregulated product, saying that government could not determine its price.
Dr. Philip Mshelbila, Managing Director and Chief Executive Officer, NLNG had earlier this month, said the company had reduced its exports of cooking gas in a bid to meet the growing demand at the domestic market.
According to him, local market supplies had reached 450,000MT from 50,000MT in 2007.
The technical adviser to Petroleum Minister, Timipre Sylva on gas, Derefaka Opelamina could not be reached at the time of filing this report.