TheNewsGuru

Tag: LPG

  • Price of cooking gas has started dropping – Marketers

    Price of cooking gas has started dropping – Marketers

    The price of Liquefied Petroleum Gas (LPG) popularly known as cooking gas has started dropping, marketers have confirmed.

    TheNewsGuru.com (TNG) reports Mr Bassey Essien, the Executive Secretary, Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) and Mr Michael Umudu, National Chairman, Liquefied Petroleum Gas Retailers (LPGAR) confirmed this on Monday.

    According to Essien, the announcement that the government was reintroducing value added tax (VAT) on imported LPG created panic in the market which led to the hike experienced in the price of cooking gas in 2021.

    He said the federal government was yet to implement the payment of VAT on imported LPG, and as a result the price of the product across the country has started dropping.

    Recall that the government had in 2019 gazetted the removal of VAT on LPG to increase its domestic utilisation. However, in July 2021, the marketers were notified about the reintroduction of VAT on the product as the government moved to shore up its revenue sources.

    Essien urged the government to urgently clarify its position on the issue, saying: “The announcement that the government was reintroducing VAT on imported LPG created panic in the market which led to the hike we experienced in the prices of cooking gas in 2021.

    “Some marketers stopped importation, and don’t forget that about 60 per cent of LPG consumed in Nigeria is imported. The NLNG only supplies about 450,000MT and our LPG consumption is over one million metric tonne, so imposing VAT on imported LPG affected the market.

    “However, government is yet to begin collection of VAT payment in spite the announcement which has encouraged more marketers to restart importation.’’

    He said the impact was currently being felt as the prices of cooking gas had reduced from about N10,000 and N10,500 for a 12.5kg gas cylinder to about N7,400 and N9000, across the country.

    According to Essien, supply has increased and as it continues, the prices will continue to decline but it is still a far cry from where we are coming from.

    “In January 2021, a 20 metric tonne truck was about N4 million but it is currently about N9.7 million.

    “We have to look at all the factors that drove the prices up including LPG demand in the international market and find a way to domesticate LPG supply to ensure price stability.’’

    Meanwhile, Umudu has said the decline in the prices of cooking gas was a welcome development.

    Umudu said: “we as retailers suffered so much because many of our customers switched to charcoal and firewood because they could no longer afford to buy gas.

    “Now, supply is increasing and we are hoping that if it is sustained, there will be further reduction in the price of cooking gas.

    “We learnt that government has not implemented the VAT policy but the pressure that the pronouncement brought to the industry led to the hike in the price of LPG.

    “We want the government to come out openly to say that they have removed VAT on imported LPG so that there will be stability.’’

    He emphasised the need for the government to encourage more Nigerians to embrace gas because of the attendant health benefits to the nation.

    “Government has announced many policies aimed at deepening gas utilisation such as the Decade of Gas Development initiative and the National Gas Expansion Programme.

    “However, these programmes need to be workable and not just on paper. There need to be infrastructure on ground to support their implementation,’’ Umudu added.

  • Cooking gas marketers deny distorting LPG market

    Cooking gas marketers deny distorting LPG market

    The Major Oil Marketers Association of Nigeria (MOMAN) says its members are not responsible for activities distorting the Liquefied Petroleum Gas ( LPG) market and attendant increase in the price of cooking gas across the country.

    Mr Clement Isong, Chief Executive Officer, MOMAN, made this known in a statement issued on Tuesday in Lagos.

    Isong said it was untrue that some marketers who are MOMAN members had formed a cartel which engaged in rejecting LPG supply from the Nigeria LNG Limited in their depots.

    He said: “MOMAN wishes to state categorically that we are not a cartel, nor do we engage in manipulating prices of any petroleum product.

    “MOMAN strictly adheres to local and international regulations, laws, and best practices to ensure that it is not complicit nor create an impression that it engages in anti-competitive practices such as price fixing and price gouging.”

    According to him, in the the case of LPG, the market is dominated by local independent marketers.

    Isong said the collective market share of MOMAN members either in terms of LPG storage or volume throughput was less than five per cent of the Nigerian market.

    He said that it was therefore untrue to suggest that MOMAN membership could in any way influence the supply or price of the product.

    “Finally, storage facilities for white products have different specifications and safety requirements different from storage facilities and assets for LPG and cannot be interchanged.

    “It is therefore wrong to suggest operationally that a marketer would prefer one to the other.

    ” A lot of investment in LPG infrastructure still needs to be made, hence government’s policy on the gas infrastructure fund,” Isong said.

    He commiserated with the Nigerian consumers struggling with the high costs of LPG caused by global supply challenges, high international prices, limited availability of foreign exchange and high exchange rates.

    Isong said MOMAN would continue to support government policies that encourage investments in the supply chain which will eventually optimise logistics costs and reduce prices.

  • Why cost of cooking gas is skyrocketing

    Why cost of cooking gas is skyrocketing

    The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has explained that the reintroduction of value added tax (VAT) on Liquefied Petroleum Gas (LPG), also known as cooking gas, is the reason why the cost of the commodity is skyrocketing.

    TheNewsGuru.com (TNG) reports Mr Bassey Essien, Executive Secretary, NALPGAM, who made this known in Lagos State, said the rising trend in the cost of cooking gas will continue if the Federal Inland Revenue Service (FIRS) and the Federal Ministry of Finance do not stop the VAT policy.

    Recall that the federal government had in 2019 gazetted the removal of VAT on Liquefied Petroleum Gas (LPG), also known as cooking gas, as a product to increase its domestic utilisation.

    Essien, appealing to the Federal Government to reconsider the imposition of Value Added Tax on imported LPG in the country, said the reintroduction of the policy would further increase the prices of cooking gas across the country.

    “It is unfortunate that the Federal Inland Revenue Service and the Federal Ministry of Finance have gone to resuscitate a product that has been exempted and gazetted from VAT.

    “This was gazetted in 2019 and has encouraged domestic gas utilisation.

    “Nigerians are already complaining about the prices of cooking gas across the country and this would further worsen the situation,’’ he said.

    Essien noted that while the government was desirous of expanding its revenue base, it should also consider the impact the reintroduction of VAT on importation of LPG would have in the country.

    “The government has declared the Year 2021 to Year 2030 as the Decade of Gas in Nigeria with the goal of deepening gas utilisation.

    “However, this goal will be defeated if cooking gas goes out of the reach of ordinary Nigerians due to the current increment in prices of the commodity.

    “The price of 12.5kg cylinder of cooking gas is between N6,000 to N6,500 across the country. It was being sold for about N4,000 averagely a few months back,’’ Essien said.

    He said more than one million metric tonnes of gas were consumed by Nigerians in 2020, with about 60 per cent of the product imported by marketers.

    According to him, “we import to augment the 350,000MT allocated to the domestic market by the Nigerian LNG Company Limited.

    “So putting VAT on it simply means that Nigerians will pay more and if we go on this route, the price of 12.5kg might hit N10,000 in some parts of the country by December.’’

    He further noted that some users of cooking gas were gradually reverting to the use of kerosene and firewood with the attendant health implications.

    However, Mr Sarki Auwalu, Director, Department of Petroleum Resources (DPR), said the government had to re-impose VAT on imported LPG to attract investments to local gas production.

    “For me personally, I wouldn’t like us to be importing LPG. This is a country that has over 600TCF of gas. We have proven reserves of 206TCF.

    “If you allow LPG to be imported without any restriction, it means you are not giving opportunity for upstream investors that will drill and get this gas.

    “Nigeria gas is sweet and rich. Sweet means that there is no sulphur. Rich means that it is rich in liquid. Anywhere you see gas in Nigeria, you can extract condensates out of it which is another input to the industry.

    “You can extract propane, then you extract the LPG butane. So it is this LPG butane that they are bringing in because it is easier to go and buy and sell it here, especially with no payment of VAT.”

    According to him, the removal of 7.5 per cent VAT on LPG importation is a discouragement for potential investors in the upstream sector which transcends to double losses for the government.

    “Government is losing through VAT and losing investors which are double jeopardy. So for us, it is a policy to encourage the inflow of investment in the gas sector,’’ he said.

    Auwalu added that initiatives such as the Nigerian Gas Transportation Network Code and the Nigerian Gas Flare Commercialisation Programme were geared towards attracting investments to the industry.

  • Why price of cooking gas is on the increase in Nigeria

    Why price of cooking gas is on the increase in Nigeria

    The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has given reasons why the price of Liquefied Petroleum Gas (LPG), also known as cooking gas, is on the increase in the country.

    Mr Bassey Essien, Executive Secretary, NALPGAM, who made this known on Tuesday in Lagos State, decried the continuous increment in the price of the commodity in the past few months, stressing that the Federal Government alone cannot halt the hike in the price of the commodity across the country.

    Essien, noting that there was need to put in place a policy that would encourage full domestication of LPG, said: “The major issue we have with gas price is that majority of what we are consuming is imported.

    “Over one million metric tonnes of gas was consumed by Nigerians in 2020 and about 65 per cent of the product was imported by marketers.

    ”So the price of gas is affected by what is happening in the global market because though Nigeria produces about four million metric tonnes of gas annually, only 350,000MT is allocated to the domestic market.

    “Unfortunately, the government cannot increase the allocation to meet our full domestic demand without the buy-in of other partners of NLNG.”

    Essien told NAN that the hike in the price of cooking gas was affecting the government’s National Gas Expansion Programme, which was aimed at deepening gas utilisation in Nigeria.

    He noted that some users of LPG were gradually reverting to the use of kerosene and firewood with the obvious health implications.

    Marketers generally believe that it is not feasible for the government to unilaterally direct the Nigerian Liquefied Natural Gas Company Limited (NLNG) to increase its domestic LPG allocation without the support of other stakeholders.

    Experts are of the opinion that a considerable increase in domestic LPG allocation would translate to a reduction in the price of gas as against the current soaring price of the essential commodity.

    NLNG is an incorporated Joint-Venture owned by four shareholders.

    They are: the Federal Government of Nigeria, represented by Nigerian National Petroleum Corporation (NNPC )(49 per cent) Shell Gas B.V. (25.6 per cent) Total Gaz Electricite Holdings France (15 per cent) and Eni International N.A. N. V. S.àr.l (10.4 per cent).

    Indeed, many ordinary Nigerians are agonising over the effect of the soaring price of cooking gas.

    For instance, a food seller, Mrs Iyabo Oni, told NAN that the increment in the price of cooking gas was affecting her business negatively.

    “I have started using firewood to support my cooking because gas is very expensive and customers will be grumbling if you increase your food cost.

    “The challenge is that the process is more difficult for me because I like my restaurant to be neat always,” she said.

    Also, Mr Okechukwu Agwu, a banker and bachelor, said he preferred buying food now because of the increment.

    He said: “I used to refill my small camp gas with less than N2,000 but things have gone up so I just buy food to eat now. I think it is cheaper and less stressful for me.”

    The price of a 12.5kg cooking gas cylinder has increased from N3,300 in December 2020 to about N5,000 at retail outlets in the past few weeks.

  • DPR prohibits cylinder to cylinder gas refilling – Official

    DPR prohibits cylinder to cylinder gas refilling – Official

    The Department of Petroleum Resources (DPR) has warned Liquefied Petroleum Gas (LPG) retail outlets against cylinder to cylinder gas refilling and decanting because of the associated risks.

    Mr Sadeq Ibrahim, Operations Controller, Yola DPR Office, gave the warning at a one-day sensitisation meeting with gas retailers in the state held on Monday in Yola.

    Ibrahim said that the warning became necessary to prevent fire disasters as well as protect lives and property of the people.

    He said that the department would no longer tolerate the dangerous cylinder to cylinder gas refilling business for the safety of the people and also for those handling the business.

    “LPG cylinder to cylinder re-bottling, refilling and decanting is prohibited by Department of Petroleum Resources (DPR).

    “The transfilling of the resources are not allowed and is against the DPR regulations and requirements because the business is highly hazardous and a threat to lives and property of the people.’’

    According to Ibrahim, the department has recorded many fire outbreak accidents across the country as a result of poor handling and unsafe cylinder to cylinder gas refilling process.

    He advised the retailers to go and address how to improve their businesses as the department had no intent to push them out of the business.

    He said that among the roles of the gas retailers as stated in the DPR regulations was to sell a full gas cylinder, either through cylinder exchange or a new one.

    Ibrahim advised the gas retailers to put safety measures in their shops and also register with the DPR.

    “All gas retailers in the state are advised to provide protection safety facilities to their workers and the shop.

    “Also, the retailers outlets are advised to register with the DPR to obtain approved licence’’, Ibrahim said.

    In his remarks, Mr Emmanuel Ogbodo, Chairman, LPG Retailers Outlets Association, Adamawa, thanked the department for organising the sensitisation meeting for their members.

    Ogbodo said that the sensitisation was an eye opener to the members and that the association would look at the request of the DPR and deliberate on it.

  • Explosions: FG begins clampdown on illegal gas plants, roadside LPG retailers

    Explosions: FG begins clampdown on illegal gas plants, roadside LPG retailers

    The Federal Government has begun clampdown on illegal gas plants and roadside retailers of Liquefied Petroleum Gas (LPG), popularly known as cooking gas, an official said.

    Mr Bassey Nkanga, DPR’s Operations Controller, Port Harcourt Zone, disclosed this in an interview with News Agency of Nigeria (NAN) on Monday on the sideline of the department’s ongoing surveillance on gas plants in Port Harcourt.

    NAN reports that government had in May stopped customers’ ownership of cylinders as well as barred the refilling of gas cylinders by the roadsides and other unauthorized places.

    The policy, the government said, would require that the ownership of LPG cylinders rest solely with the dealers and distributors.

    According to Nkanga, the department had held several meetings with operators of gas plants and LPG retailers to introduce them to standard minimum requirements acceptable in the industry.

    “The new model by government; decanting (transferring from one gas cylinder to another) is not allowed, trans-filling is also not allowed.

    “That is why we are encouraging, enlightening, and engaging them (retailers) to adopt the new methodologies, whereby, somebody would have to drop (empty cylinder) and pick another one with gas.

    “The era of decanting, transcanting and transferring from one cylinder to the other is no longer going to be allowed

    “So, we have been talking to them (retailers) and they even formed a union to register for the Category D licence. A lot of them have turned up, and so many are yet to turn up,” he said.

    Nkanga further said that government was also clamping down on operators of illegal gas plants; those operating without valid licence and others operating within residential areas.

    He said most of the outlets lacked basic and standard minimum requirements like fire extinguishers and detectors, water sprinkler, temperature gauge, pressure and volume, among others.

    The department, he said, had brought in competent personnel to oversee its gas division and ensure that operators function within stipulated guidelines and regulations.

    “We also had several meetings with various stakeholders in the gas sector. We told them those operating without licence will not be allowed to operate again.

    “We even gave them two months within which they have to renew their licences; and we have decided to pull the full weight of the law on those operating without valid licences.

    “There is a fine for those operating without valid licence; and those that are illegal, we will hand over to the security agencies. It is illegal to operate without licence.

    “This exercise has just started on the gas facilities, and it would be continued. We have requirement and you must meet the requirement before you are allowed to setup a gas plant,” he said.

    Nkanga said government was working hard to ensure the availability of affordable cooking gas to rural areas in the country.

    NAN reports that four gas plants, including, Forte Oil, Sun Gas, Timi Gas Limited and Kayzavia Energy were either sealed for not having valid permit and operating without the necessary safety precautions.

  • Temile, Hyundai sign $120m Ship Building Contract to boast Nigerian LPG Market

    Temile, Hyundai sign $120m Ship Building Contract to boast Nigerian LPG Market

    Temile Development Company Limited; an indigenous shipping company operating in the Nigerian oil and gas industry, has signed a ship building contract with South Korean shipbuilder; Hyundai Heavy Industries Limited to build one firm and one optional Liquefied Petroleum Gas (LPG) carriers. Both vessels are valued at over $120m with the first carrier expected to be delivered by the first quarter of 2020.

    The contract, which was signed in London recently between Temile Development Company and Hyundai Heavy Industries officials was witnessed by the CEO, Nigerian Liquefied Natural Gas Company (NLNG), Mr. Tony Attah, Executive Secretary Nigerian Content Development and Monitoring Board (NCDMB) Engr. Simbi Wabote and Deputy Managing Director, Fidelity Bank, Mr. Mohammed Balarabe. Fidelity Bank is the main banker to Temile Development Company Nigeria Limited.

    Temile Dev. Company Limited is a 100 percent wholly owned Nigerian company which 5 years ago began its marine and offshore operations, with a vision to revolutionize the shipping business in Nigeria. The company’s fleet comprises of 16 offshore vessels, acquired within the last 5 years. The new carriers would be the first of their kind in the West African oil and gas market and would enable the company service an on-going time charter LPG contract with NLNG.

    “We have extensive experience in various sectors of the oil and gas industry in Nigeria, with particular interest in the offshore shipping and logistics. Our entrance into LPG market is exciting and we are in very safe hands to have ordered a LPG carrier from Hyundai Mipo Dockyard. This will no doubt increase the participation of Nigerian investors in the LPG space” said CEO, Temile Development Company Limited Mr. Alfred Temile.

    Also speaking at the ceremony, CEO, NLNG Mr. Tony Attah said the transaction was indeed ground breaking, explaining that it supports the quest to develop the domestic LPG market and aid the growth of indigenous companies in the process. “NLNG’s domestic LPG intervention scheme aligns with our business focus of bringing energy to the world and helping to build a better Nigeria” Attah stated.

    Whilst commending Temile Development Company for the trailblazing move, DMD, Fidelity Bank, emphasized the need to increase local participation of indigenous companies in the oil and gas industry and reiterated the bank’s support for indigenous players to grow capacity. “The attendant effect on job creation and economic development is huge and unimaginable if Nigerian companies can participate more in the entire oil and gas value chain” said Balarabe.

  • Excessive tariffs killing development of LPG market – Adeshina

    Excessive tariffs killing development of LPG market – Adeshina

    The President of the Nigeria Liquefied Petroleum Gas Association, NLPGA has said that the high tariff placed on the importation of Liquefied Petroleum Gas, LPG (cooking gas) equipment is militating against the growth of the LPG market.

    Adeshina therefore called for the reduction of the tariff on LPG equipment and accessories, maintaining that if left unchecked, millions of households and businesses would be affected by the situation.

    In his words: “Factors that continue to affect and hinder the growth of the industry include tariff on LPG equipment. These pieces of equipment are imported and the tariffs on them have increased tremendously. The local tools manufacturing company that used to give us some of these components is shut down and we are hoping for incentives from the government so that the tariffs won’t be high.

    “For the first time, we saw the Federal Government making pronouncements through the Vice President, Prof. Yemi Osinbajo, on LPG. However, we were shocked when the list of tariffs came out and we didn’t see anything relating to LPG. This shows there is a disconnect somewhere and we hope that this will be addressed in the shortest possible time.”

    Adeshina added that Nigerians were beginning to appreciate the benefits of LPG going by the large number of households now using the product for domestic purposes.

    He explained that if fully tapped into, LPG had the capacity to promote a cleaner and safer environment.

    He said, “With increased awareness, Nigerians are beginning to see the many benefits of LPG. It has other uses apart from the purpose of cooking alone. It is the cleanest fuel you can come across today.

    “If government intervenes, we can shift from 500,000 tonnes per annum to two million tonnes per annum. So we need the support of government on tariffs and duties, including other critical areas to improve our capacity and deliver better services to Nigerians. We expect that by the third quarter of this year, decisions that will bring in investors would have been taken so that the industry can move forward.”