The price of Liquefied Petroleum Gas, LPG, otherwise known as cooking gas, has increased by 27.27 per cent between October and November 2019, because of the forces of demand and supply and foreign exchange issues, which constrained some operators from importing the product.
Investigations in Lagos and its environs showed that the price of the product stood at N3.3 million per 20 metric tons on October 14, 2019, before rising to N4.2 million for the same quantity on November 4, 2019.
A market survey, conducted also indicated that, the retail price of the product has increased from about N3.400 (12.5kg), to between N3,500 and N3,600, depending on location, during the period.
Operators, who preferred not to be named, because they were not permitted to speak said the price might likely continue to rise nationwide, following the coming of Christmas and New Year, usually characterised by increased use of energy, including cooking gas.
However, the executive secretary, Nigerian Association of Liquefied Petroleum Gas Marketers, NALPGAM, Mr. Bassey Essien, stated: “Within the last one week, LPG price has soared so astronomically that it beats the imagination of marketers as to the cause.
“The price hike will ultimately dovetail into high prices to the consumers. The consumers will in turn want to blame marketers who unfortunately are also caught up in the web of price hikes.
“Within a 5-day period, the price of a 20MT of LPG which hitherto sold for N3.15m, suddenly jumped to N3.5m, N3.9m and within a few hours moved to N4.2m despite the fact that same product has been in the storages of these Terminals when price was even sub N3.5m.”
“Efforts to extract the cause of the sudden and hourly price increase from the Terminals have not been met with any positive response.
At one of the terminals, there was an outright denial of any price increase, however, price of LPG has been moved from N3.9m to N4.2m.
“Some marketers who had paid down for LPG when the price was N3.45m but were awaiting loading were being intimidated with refund of their money except they agreed to pay the difference in the new price despite having tied down their funds without loading their trucks.
“At another terminal, it was attributed to the interplay of the forces of demand and supply and in this case demand had outstripped the supply.
Elsewhere importers have also attributed the low supply to delay in accessing foreign exchange from CBN, which has accounted for delayed payments to their business associates thus the inability to oil the LPG supply cycle.”
The executive secretary added: “The Association is hereby disassociating itself and members from the antics of the current price hike and therefore maintaining that the price increase is not the handiwork of marketers but rather that of the Terminal Owner, Importers and the Nigeria LNG Limited.
Marketers are equally bemoaning the situation as the development has adversely affected business planning.
If the trend is not halted immediately, the price of a 12.5kg cylinder of cooking gas may soon sell for over N6, 000.00 and well out of the purchasing power of the average consumer.
Mr. Essien stated: “Importers to free the PPMC Depot in Lagos for the delivery of NLNG product allocation.
NLNG should supply LPG to other coastal terminals outside Lagos to reduce the inherent pressure on the terminals in the South West.
NLNG should deploy vessels of smaller capacities to access the coastal terminals if product availability must be achieved.
Speaking at the just concluded OTL Africa Summit, the Minister of State for Petroleum Resources, Chief Timipre Sylva, had said: “LPG expansion programs with the intention of making it the first choice of energy for domestic and industrial purposes is ongoing.
“This is being pursued through “the LPG Penetration Initiative” of the Ministry of Petroleum Resources.
“The framework is designed to achieve at least 40 per cent fuel switch to LPG by 2025, attainment of 5MM MT domestic utilization of LPG and the creation of an estimated 500,000 job opportunities within the next 5 years.”