By Jeph Ajobaju, Chief Copy Editor
Alternative means of fuel are being devised by Nigerians as the price of cooking gas has shot up to N500 per kilogramme in a country the sixth world’s largest producer of crude oil and seeking to export its abundant natural gas.
Even middle class homes are weighing the prospects of joining the well less off to cook with charcoal, kerosene, and firewood amid rising food prices coupled with high unemployment and pervasive poverty.
Investigation by The PUNCH found that the price of cooking gas has risen by more than 60 per cent since December 2000 on the back of inadequate gas supply and naira devaluation.
As cooking gas prices have pointed north, more Nigerians, especially in rural and semi urban areas, have been discouraged from using gas for cooking.
Some who do not have prepaid electricity metres are increasingly using electric cookers to reduce cooking gas bill.
In January this year, the price of 20 metric tonnes (mt) of liquefied petroleum gas (LPG) rose by over 29 per cent to N5.5 million from N4.25 million in November 2020.
The price of 20 mt of LPG sold by terminal operators and importers surged 30.91 per cent in six months to N7.2 million in January, according to LPG in Nigeria, a fuel advocacy.
A gas plant in Lagos refilled a 12.5kg cylinder for N5,200 in July, up from N4,400 on in June and N3,200 in the last quarter of 2020 (Q4 2020).
Refilling a 12.5kg cylinder now costs between N5,200 and N5,600, up from N4,000 and N4,500 in December. A retailer at Ogba in Lagos refilled 3kg for N1,500 and 5kg for N2,500. This translates as N500 per kg.
Liquefied Petroleum Gas Retailers Branch of NUPENG National Chairman, Chika Umudu, told The PUNCH the problem arises from high dependence on gas import.
“As the dollar is appreciating against the naira, the price of LPG is increasing,” he said.
Inadequate gas import
The Central Bank of Nigeria (CBN) devalued the naira in May as it adopted the NAFEX exchange rate of N410.25 per dollar as the official rate. The naira currently trades at about 503/$1 at the parallel market.
Umudu said Nigerian LNG, which accounts for more than 40 per cent of LPG supply in the country, should supply the domestic market based on demand, rather than fixing the quantity per year.
His words: “The increase in cooking gas price, which started last December, doesn’t speak well of the policy direction of the government.
“As much as I will not advocate for subsidy the way it is being done with petrol, I think there are ways the government could make cooking gas affordable to Nigerians.
“People in rural areas and semi-urban areas, who are even the major target of LPG expansion, are beginning to dump their cylinders. It is not a good development.
“Cooking gas sales have dropped by 50 per cent at my outlet in Anambra State. People are now using firewood, sawdust and charcoal.”
In Lagos and other major cities, according to Umudu, some restaurants are turning to charcoal and firewood because their costs cannot accommodate the hike in the price of cooking gas.
“Government should work out a framework with NLNG to meet local demand and equally encourage other multinational companies to supply the domestic market so that we stop talking about importation of LPG.”
Multiplier effect
Adeleke Adeshina, a resident of Oworonshoki in Lagos, said the increase in the price of cooking gas has affected the quantity of food sold to customers by vendors.
“I filled my gas cylinder two months ago for N400 per kg. Last Saturday, I paid 500/kg to the man who sold it to me.
“The recent increase affected how food vendors sell their food to us. They now sell their food based on the price at which the cooking gas is bought for,” he narrated.
Executive Secretary/Chief Executive Officer, Nigerian Association of LPG Marketers, Bassey Essien, said with 20 mt of LPG being sold for over N7 million, the amount of money that fetched 40 mt some months ago now fetches 20 mt.
“We are not happy about the price hike,” he said, stressing the need for frequent supply of LPG by the NLNG. “It is only one vessel they (NLNG) have, and it supplies Lagos and Port Harcourt, so the replacement cycle is longer.”
According to him, since the country depends heavily on imports, the demand for scarce foreign exchange (forex) will cause price hikes.
“There is need for domestic supply to be increased so that we can have less dependence on importation,” Essien said.
The NLNG said last September that its board of directors had approved an increase in the volume of LPG supplied to the domestic market from 350,000 mt to 450,000 mt per annum.
