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  • Marketers raise alarm over rising price of cooking gas

    Marketers raise alarm over rising price of cooking gas

    The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has raised the alarm over the rising price of liquefied petroleum gas (LPG), otherwise known as cooking gas, in the country.

    Mr Abideen Olatunbosun, National President, NALPGAM, raised the alarm during the 36th Annual General Meeting of the association held in Ibadan on Tuesday.

    Olatunbosun appealed to the Federal Government to find a lasting solution to the rising price of cooking gas in the country, stressing that if not addressed, cooking gas might become a commodity only affordable to the affluent.

    “It is very vital for me to state that continuous increase in the price of gas in recent time stands as a big challenge to LPG marketers.

    “The government needs to find ways to ensure stability of gas price as well as make gas available to common Nigerians.

    “As a country, we need to improve on our gas utilisation level and if we all adopt gas, it will save our forest and improve quality of our lifestyle and the economy will grow,” he said.

    According to Olatunbosun, the hike in the price of gas is a concern to all.

    Olatunbosun called for collaborative efforts between the government and the private sector to establish critical gas infrastructure.

    Speaking at the event, the guest speaker, Prof. Sunday Isehunwa of the Department of Petroleum Engineering, Faculty of Technology, University of Ibadan, said that LPG offered a huge promise for increased domestic gas utilisation in Nigeria.

    He said that cooking gas also served as the country’s energy transition to net-zero carbon emission by 2060.

    According to Isehunwa, there is need for increased LPG supply to meet rising demand and curtail sharp practices by some operators.

    “The Nigeria Liquefied Natural Gas (NLNG) has been the major supplier of LPG, however, additional supplies are essential through functional refineries, and adequate natural gas processing facilities.

    “Removal of difficulties in importation when necessary is also essential for additional supplies.

    “Adequate infrastructure development is highly necessary to enhance access to LPG by rural communities.

    “Accessibility will increase through increased economic empowerment of consumers and relatively low costs of products,’’ the don said.

    Also, Mr Ogbugo Ukoha of the Nigerian Midstream And Downstream Petroleum Regulatory Authority (NMDPRA), said that the recent deregulation policy would result to a reflective petroleum products pricing.

    Ukoha, who is the Executive Director, Distribution Systems, Storage and Retailing Infrastructure, NMDPRA, noted that current data had shown that the domestic gas supply had overtaken the import supply.

    He said that necessary infrastructure investment must be put in place to address challenges of gas reserve so as to achieve smooth distribution of the product.

    “Our focus is to make necessary investment in gas infrastructure to increase LPG supply so as to force its price down for Nigerians,” Ukoha said.

    The AGM featured the dissolution of the current governing council of NALPGAM, election of new national executives and the presentation of plaques.

  • Why price of cooking gas may surge soon

    Why price of cooking gas may surge soon

    The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has alluded to the reason why the price of cooking gas may surge soon.

    NALPGAM disclosed that the hike in the foreign exchange rate and activities in the international market may result in an increase in the price of cooking gas.

    Mr Olatunbosun Oladapo, the President of the association, who made the disclosure an interview on Thursday in Lagos, noted that a gas terminal operator sent out an official notification of the changes in price, attributing the increase to a significant hike in forex rate and scarcity of same.

    He cited rising international prices, high tax rates, prices of vessels, forex scarcity, and naira devaluation as some of the reasons for the price review.

    “It is starting next week because international prices have gone up. The prices of vessels have gone up and taxes are high.

    “Consumers, middlemen, and retailers are feeling the impact because business is now on the low side,” he said.

    Olatunbosun, who described the imminent price increment as unfortunate, said: “The situation is very unfortunate because prices are going higher.

    “The government should come in and alleviate the suffering of the masses by providing palliatives, reducing taxes and levies.

    “You can imagine that for every 1kg of gas priced at N700, tax would take way N3.50. How much is left in such a business?”

    Olatunbosun urged the government to tax profit and not products because consumers were not buying gas anymore.

    He also argued that local taxes are worsening the situation, adding that marketers, who had the opportunity to buy products locally, to fix prices with “consumers’ sympathy” in mind.

    Recall that the National Bureau of Statistics (NBS) had said the average retail price for refilling a 5kg cylinder of cooking gas decreased by 6.71 per cent month-on-month from N4,360.69 recorded in May to N4,068.26 in June.

    On a year-on-year basis, it decreased by 3.56 per cent from N4,218.38 in June 2022.

    On state profile analysis, Kwara recorded the highest average price for refilling a 5kg cylinder with N4,750.00, followed by Niger with N4,691.16, and Zamfara with N4,683.33.

    On the other hand, Ondo recorded the lowest price with N3,287.86, followed by Ekiti and Nasarawa with N3,288.46 and N3,364.62, respectively.

  • 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.

  • Association blames foreign exchange for cooking gas price hike

    Association blames foreign exchange for cooking gas price hike

    The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has blamed foreign exchange scarcity for the current high price of domestic gas.

    Its Executive Secretary, Mr. Bassey Essien, said this in Lagos on Wednesday that the current high price was arbitrary.

    Essien said that sourcing foreign exchange during the festivities posed a serious challenge to marketers to buy LPG from gas off-takers.

    He said that although the product was being sourced locally, but marketers were paying international rates to buy it and this had posed serious challenges to marketers.

    Essien said there was no justification for the current high price for a product produced locally.

    The marketer said it was unreasonable to charge dollar rates for a product that was being produced locally and transported from Bonny Terminal to marketers.

    He said that marketers had condemned the practice and even complained but to no avail.

    Essien appealed to Federal Government to urgently look into the frequent price changes from the manufacturers.

    He also appealed that preference should be given to local market in the supply chain.

    “Inability to get adequate product from the manufacturers during the festivities contributed to the price hike.

    “Only few trucks discharged LPG at the Apapa Terminal during the Christmas and New Year break,’’ he said.

    Essien said that a truck of gas, which usually sold at N 4.3 million per 20 metric tons, was sold for N6 million per 20 metric tons during the Christmas period.

    He said that this price increase at the terminal impacted negatively at the retail end where a 12.5kg cylinder, formally sold for between N3,000 and N3,200, went up to N4, 500.

    Alhaji Auwalu Ilu, the Chairman, Ultimate Gas Ltd., also said that the price hike could be linked to the winter season abroad.

    “We are approaching winter now and the international price is going up, which is the usually the case.

    “It’s usually high during this period because we are bound by the international price.

    “It is pricing problem; it’s usually on the increase on daily basis. The demand is higher during winter in Europe and America since gas is used to heat,’’ he said.

    Some users have condemned the sudden hike in price of cooking gas

    The price of refilling a 12.5kg cylinder, which was between N3, 200 and N3, 500, suddenly went up to between N4, 300 and N4, 500 during the yuletide.

    Mr. Chika Umudu, the Chairman of Liquefied Petroleum Gas Retailers (LPGAR) said that his members spent days at LPG plants to get supplies.

    Umudu said that the price hike was unfortunate at this time when many Nigerians had adopted the use of the cleaner energy

    Mr. Julius Godwin, a retailer in Lagos, said that the business of selling cooking gas was no longer profitable.

    “I am still selling the product to earn a living as the profit margin is low,” he said.

    On the average, retailers in Lagos have increased the price by over 15 per cent.

    Mrs. Toyin Ashimiyu, a gas retailer at Oyingbo market, said that the price of the product was outrageous considering the current situation in the country.

    Mrs. Florence Johnson, a housewife, said that the increase in price was an additional hardship to many families.

    “I used to buy the 12.5kg between N 3, 300 and N3, 500 and it lasts for three weeks or even up to one month.

    “I was surprised when I was told that the price had gone up to N4, 500,” she said.

    Johnson said it was unfortunate that prices of products kept increasing on daily basis.

    Another user, Mrs. Folake Adeshina, said that the 12.5kg, which sold for N3, 200 before the festivities, had risen to N4, 300.

    Adeshina appealed to the Federal Government and marketers to urgently find a lasting solution to the price hike.

    She said that the price hike was unfortunate this period when many housewives were trying to adopt cooking because it is cleaner, cheaper and healthier for homes.