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Energy Crisis: Cooking gas scarcity, price hikes hit consumers in Lagos, Kano, Delta, Katsina, others

Cooking Gas Cylinders at LPG Depot

*Several consumers and dealers in Liquefied Petroleum Gas, also called Cooking Gas, are currently experiencing both product scarcity and price hikes in Lagos, Sokoto, Kano, Delta, Katsina, and some other states of the Federation, say reports

Isola Moses | ConsumerConnect

Scarcity of Liquefied Petroleum Gas (LPG), otherwise known as Cooking Gas, again, has been noticed in Lagos, Sokoto, Kano, Katsina, and some other states of the Federation, leading to increased prices for product consumers.

The other affected states, according to checks, include Katsina, Sokoto, Delta, Kaduna and Kano.

ConsumerConnect had reported the LPG experienced a relative rise in price of the commodity weeks ago.

There have been increases in LPG retail prices ever since then, but no official reason has been given for the scarcity in the Nigerian economy.

The report had hinted how gas terminal owners increased their product prices by 66 percent in October alone.

Price of 20 metric tonns of cooking gas has risen from N10million at the beginning of last month to N16 million as of late last month despite NLNG currently supplying 20MT of cooking gas to them at N9million, according to report.

What LPG market report says

A market survey carried out over the weekend, revealed that 12.5kg of cooking gas now sells for between N13,500 and N14,000 at the black market.

Some of the traders informed that gas plant owners are selling to them at between N1,100 and N1,200 per 1kg as they could not access enough quantity, The Punch report said.

As of June, the price of 12.5kg was around N8, 700.

In September price rose to N10,200, and as of Saturday, price had again risen to between N13, 500-N14, 000.

In a chat with President, Oladapo Olatunbosun, Nigerian Association of Liquefied Petroleum Gas Marketers, reportedly affirmed that there is currently not enough cooking gas in Lagos State.

Olatunbosun stated: “In my own gas plant, I sell at N950 per 1kg. So, by all means, the masses should try not to patronise those that don’t have gas plants because they will also add their profit.

“Those people are also part of the problem we are facing in the country.”

±Katsina also reported scarcity of cooking gas in the state.

Finings further indicated the scarcity was first observed about two weeks ago when several small retailers complained of non-availability. Investigation has also shown that a kilogram of cooking gas goes for nothing less than N1, 400 in the state.

The consumer experience in Sokoto

Scarcity of cooking gas has also been noticed in Sokoto State metropolis in the last few days, leading to prices being increased indiscriminately, report noted.

It was learnt that in Kaduna State, LPG consumers were spotted carrying their cylinders in search of the commodity as of Sunday, November 5.

Findings showed that a retail price of 5 kilogram went for N5, 500 in the state capital.

In the neighbouring Kano state, the source as well disclosed that the resurfacing of scarcity of cooking was noticed, as residents are engaging in panic buying of the commodity.

Checks showed that following the resurfacing of the scarcity, marketers have increased the prices as kilogram of cooking gas is now being sold at N850 at some filling stations, while others sold it between N900 and N950 per kilogram.

However, long queue of buyers are now common feature at most of filling stations dispensing the commodity in the ancient city.

At other outlets (black market) the price is between N1,110 per kilo and N1200 per kilo, report said.

In Delta State, market survey in Warri and Effurun, metropolitan cities indicated that the price of cooking gas had shot up to N1,100 per kg as of Sunday.

The commodity was selling at N800 per kg in October in the twin cities.

When asked about my rationale for the price increase, a popular gas dealer in Warri identified as Mr. Igho, could not ascertain the cause, report said.

When contacted on the market development, an official in the Public Communications Department of the Nigeria Gas Company, Warri, who sought for anonymity, because he was not authorised to speak with the press, declined to comment on the issue.

“It is not in my position to engage the press the way the new NNPCL is structured.”

Reports as well showed that Abuja and Kwara consumers are not experiencing scarcity though prices remain high.

In Abuja, a resident of Karu, in AMAC Area Council of Abuja, Roy, was quoted to have said that while there was no scarcity of cooking gas in his vicinity.

His experience was a mix of liquefied gas and pure gas, which no longer lasted as long as it used to.

He noted: “So for me, the problem I’m having is it liquefied. Instead of having the normal gas, you end up with like seventy percent gas, and thirty percent liquid that’s inside the cylinder, for whatever you buy.

He related though initially, they were not even aware, “we noticed that when we shake the cylinder, it’s always leaving the liquefied part under.

“So it ends within like two or three weeks before the normal period when it should last.”

Another resident, Sandra, told our correspondent that there was no scarcity of cooking gas, but noted that it had become expensive.

“I bought gas today at Abacha road in Mararaba. 12.5kg for N13,500. I wouldn’t say there is scarcity, just that it has become expensive”, she said.

Agreeing, another Kubwa resident, Cecilia, said, “It’s not scarce in my area, there’s just a price increase. I bought last Wednesday at N1,000 per Kg. Plus it doesn’t last as long as it used to”.

In Kwara, report indicated that cooking gas is available in most of the filling stations.

A dealer operating an try outlet at Gaa Odota, in Ilorin, the Kwara State capital, identified as Chief Sunday Oladele, said that gas was available at his outlet and a kilogram was being sold at N1,200.

Oladele reportedly said: “Cooking gas is available in Kwara State. I have it in my outlet which I sell at N1,200 per kg. We have not experienced scarcity in Kwara.

“There is also gas at Ogbomoso, in Oyo State, where I have another outlet and it is being sold at N1,100 per kg.

The Nigerian Liquefied Natural Gas Limited (NLNG) currently supplies the market 70 percent of the cooking gas being consumed in-country, according to Olatunbosun.

There are claims that Nigeria had the fastest growing LPG sector in the world with a projected LPG market size of $10bn, as the annual per capita consumption of LPG had risen from 1.8kilogramme in 2015 to 5kg in 2021.

According to the Petroleum Products Pricing Regulatory Agency, domestic consumption of cooking gas exceeded 1 million MT in 2020.

It said the consumption rate made 2020 the first year in the nation’s history when LPG consumption reached the 1 million MT thresholds.

Olabosun also disclosed that prices of cooking gas would have further increased from N16million for 20MT to N18million were it not for the alarm raised by gas plants owners over rising prices.

“As a matter of fact, prices would have further exploded more than it is now if not for the noise that we have been making.

“But prices are beginning to reduce at standard gas plants. It shouldn’t be more than N1000 per 1kg, and it will continue to go down.”

Interventions by market regulatory agencies

Meanwhile, the Federal Government has summoned the leadership  of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) over rising prices in the economy, according to report.

A source who sought anonymity reportedly stated: “The Federal Government summoned the NMDPRA in October and reinstated its mandate at bringing sanity to the market.

“So, all things being equal, prices of cooking gas would begin to come down any moment.”

Olatunbosun had in September warned that the price of 12.5kg could rise to N18,000 by December, if the FG does not step in to checkmate the activities of the terminal owners.

“There is a ridiculous hike in gas prices going on right now, and I am afraid that if the federal government does not step in to checkmate the activities of these terminal owners, prices could reach as high as N18 million per metric ton by December. This means that a 12.5kg could go as high as N18,000.”

According to him; terminal owners were “hiding under the guise of high foreign exchange to increase price to further increase the suffering of the masses,” he said, adding that there was no justification for the increment.

However, terminal owners have denied the allegations, but blamed the rising prices on Foreign Exchange (Forex) and increasing prices of crude oil in the international market.

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