Business

As LPG takes sudden flight from Nigerian homes

Cooking gas appears to have left many homes in Nigeria, no thanks to rise in price of the product, crude oil and natural gas at the international markets, among other factors. The problem, if not tackled, will worsen the conditions of many Nigerians, both financially and health wise, writes AKINOLA AJIBADE

 

 

Nigerians queued in twos, threes, fours and fives under the scorching sun, bemoaning the bad economy in the country. While many placed empty cylinders in between their legs, with a view to refilling them with cooking gas, others went back home frustrated. Altogether, they had different thoughts racing through their minds.

 

The event, which took place in front of one of the LPG’s marketing firms (name withheld) in Ikorodu area of the state, drew sympathy from passers-by. A passer-by echoed: “This country is finished. Imagine the kind of problems, which government has foisted on the people.

 

“Even at that, they are not bulged. Neither are they ready to defy the hot weather, nor the stress of waiting for hours, as getting cooking gas to buy is more important to them.”

 

Ordinarily, nobody can afford to stay inside the sun, browsing away sweat cascading down his cheeks and be excited. But in this case, Nigerians do not have any other option than to endure the hot weather to buy cooking gas, which prices have jumped to an astronomical level again. Since the beginning of 2021, the price of LPG has gone beyond the reach of many Nigerians.

 

LPG’s prices

 

Available records show that cost of refiling a 12.5 kilogramme cylinder within Lagos metropolis has moved from N4,500 to N4,800 within two weeks and later to N7,000.

 

This reporter, for instance, bought it for N7,000, in Ikorodu, two weeks ago. In Abuja, the story is not different, as price of refilling a 12.5 kilogrammes is between N7,000 and N7,500 depending on the area. Residents of areas such as Wuse 1 and 2 and Gwagwalada, among others in the Federal Capital Territory (FCT) are having a bitter story to tell.

 

They cannot even get LPG to buy, as many marketers of the product do come to Lagos to buy it from importers. The issue is disturbing, in view of the fact that Nigeria is reputed to be the fifth largest producer of gas in the world.

 

Nigeria’s gas potential

 

The country is said to have an estimated 600 trillion cubit feet of unproven gas reserves and over 200 trillion cubit feet of proven gas reserves. Out of this, the Federal Government, through the Nigerian National Liquefied Gas  NLNG), has been exporting tonnes of gas to awaiting buyers in Europe and beyond. Not done yet, as natural gas has become a huge revenue earner next to crude oil to government, the country is making several billions of naira from export and importation of technologies used to process gas and taxes.

Gas reserves

While Nigeria’s gas reserves are huge enough for export, generation of electricity, which has for years hovered between 4,000 and 5,000 megawatts (Mw) and, as a result, paved the way for power outage and blackout in some cases in the country, while at the same time, provide quantum of Liquefied Petroleum Gas for both individual and industrial consumers, it is obvious that the country is not harnessing its gas potential well.

 

Instead, NLNG is focusing more on export and not processing LPG in-country. No doubt, the company is fulfilling its core mandates of generating earnings for government and also provide infrastructures such as roads and education facilities, among other assistance, as part of its corporate social responsibility (CSR) programmes. However, consumers of LPG are in pains as they struggle to buy the product to no avail.

 

Hardship

 

On a daily basis, most consumers are going through pains before they get cooking gas to buy. That was the harrowing experience Nigerians are going through trying to buy cooking gas for use.

 

Like a recurrent decimal, issues such as high cost and scarcity of cooking gas keep resonating in the nation’s energy landscape. And like wild fire during harmattan, the issue has spread to October and may continue till January 2022, unless the Federal Government does something to halt the trend.

 

LPG’s allocations

 

NLNG first allocated 250,000 metric tonnes of Liquefied Petroleum Gas(LPG) to the domestic market. Later, the company increased it to 350,000 (MTS), while planning to increase it to 450,000 MTS in 2021. Its immediate past Chief Executive Officer, Mr Tony Attah, said the development became necessary in order to fully harness the country’s gas potential.

 

According to him, Nigeria has proven gas reserves of 203 trillion cubit feet, which is not maximally used. Attah was stating the obvious, as Nigeria, despite its huge gas potential, is importing LPG at a very huge cost.

 

Causes

 

Stakeholders have said that local and international developments are responsible for the surge in the prices of LPG in Nigeria. In an interview with the New Telegraph, the Executive Director, Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Mr Femi Adewole, said the rise in the price of Liquefied Petroleum Gas was coming on the heels of increase in the prices of crude oil and natural gas at the international market.

 

According to him, the price of LPG is not localised and therefore means that the issue is not pertaining to Nigeria only. He said: “The astronomical increase in price of LPG was caused by demand and supply for the product. Nigeria has no control over it, as the country does not produce one third of monthly consumption of cooking gas.”

Similarly, the President, Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), Mr Essien Bassey, attributed the increase in the price of cooking gas to reimposition of Value Added Tax (VAT), exorbitant landing cost and levies and dollars/ naira exchange rate.

 

He wondered how the Federal Inland Revenue Service (FIRS) and  Federal Ministry of Finance reintroduced VAT on LPG, after the product has been exempted from it. He said the decision by the Federal Government to declare 2021 and 2030 as a Decade of Gas also contributed to the increase in the price of LPG. The declaration, he said, implied that there would be increase in the volumes of gas in the market and, by extension, a corresponding increase in the prices of the natural gas and its by-product, LPG,

 

Effects on consumers

 

Rising prices of commodities, both consumable and non-consumable, have become an albatross, which citizens are trying to contend with in the country.

Presently, Nigeria’s inflationary rate is more than 17 per cent and is projected to reach 20 per cent or more soon, if government fails to put some checks in place. A middle aged woman, Comfort Ajayi, expressed her dismay on the issue of increase in the prices of cooking gas in Nigeria. Narrating her ordeal, she said the development had made her switch to kerosene as an alternative source of cooking for her family.

 

She said: “Apart from smokes and other hazards associated with the use of kerosene, it is still better than LPG, which has beyond the reach of many Nigerians. “Though the price of kerosene is not regulated by the Federal Government as it is sold above N200, I still prefer using kerosene as I would be able to manage it well.”

 

Similarly, a civil servant at the Federal Ministry of Works in Abuja who do not want his name mentioned said the issue of scarcity of cooking gas had compounded the woes of many Nigerians. According to him, many Abuja residents have factored the cost of LPG, which has risen beyond normal level, into their standard living. “What can we do? Nothing.

 

We just have to endure the pangs of the economy, while at the same time hoping that government would address the problems,” he added.

 

Way out

Experts advise Nigerian Liquiefied National Gas (Limited) to stay at the forefront of resolving the problems in the gas subsector, since it is the major supplier of LPG in the country. Bassey said the development was necessary to ensure meaningful solutions to problems associated with increase in price of cooking gas.

 

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