Cooking gas: Experts urge FG to halt increase, leverage domestic potential


BY BABAGANA K. M, JUNE 29, 2022 | 03:11 PM

Some Oil and Gas experts have advised the Federal Government to fully leverage on our domestic potential to end the incessant hike in price of Liquefied Petroleum Gas (LPG).

The experts also called for a better storage capacity of LPG, otherwise known as cooking gas to save the country from the repercussions of international market price dwindling.

The experts spoke in an interview with the News Agency of Nigeria (NAN) on Wednesday in Abuja, while reacting to the continuous increase in the price of cooking gas.

NAN reports that many LPG stakeholders, including consumers and retailers had complained bitterly of the constant rise in the price and suspected quality reduction which had impacted negatively on users.

Dr Olanrewaju Aladeitan, an Oil and Gas expert said gas was traded as an international commodity and was therefore, subjected to global vulnerabilities and shock.

According to him, the current situation is worsened by the ongoing Russian and Ukraine war.

“The situation remains the same. Our best bet is to leverage on our domestic potential to the fullest, otherwise, we would continue to experience rising cost of gas,” he advised.

Also speaking, an economic expert, Mr Yushau Aliyu said the perspective was that enough domestic investment had not been made in the industry in view of the high price of LPG staggering between 800 and 900 Naira per kilogramme.

Aliyu, while decrying that the country depended a lot on importation of LPG, said it was not good because when prices changed in the international market as a result of many factors, definitely it would bounce back to the consumers.

“The consumers’ income is going to be eroded and when consumers’ incomes continue to be eroded, it will have a multiplier effect on the economy and that is what is causing so much uneven distribution of resources.

“However, one important aspect is that we cannot disassociate the situation from the Russian-Ukraine disturbances.

“We have to understand that Russia is trying to maximise its benefits by supplying less and taking more. Russian is trying to punish European countries by distorting supply function.

“In this scenario, the Russian government will continue to reduce the amount of supply, capitalising that the west must remove certain economic sanctions against Russian economy,” he saidAccording to Aliyu, if the strain continues, this can portend bigger problems because people will run back to deforestation.

This, he said implied that more people would opt for charcoal and if that continued, all efforts geared toward afforestation would have a negative effect on our environment and our health.

“The health hazard is going to be disastrous for the economy as anyone who fails to spend for LPG will have to spend in the hospital to take care of the challenges coming from the domestic use of coal.

“These are the consequences,” he said.

Aliyu, while appealing for a better LPG storage capacity, said the country produced only 40 per cent of gas for consumption which was not enough and caused the importation of 60 per cent.

In order to get rid of such challenges, the economist said the government must boost domestic investment in LPG.

“For example, project like the NNPC AKK Gas Pipeline, if successful will promote supply capacity but storage capacity is also a challenge and we need to take care of longer periods when there is distortion of price.

“Also, most economists in the world are looking up to gas subsidies for the less privileged.

“As they cannot enjoy when the price is N900 per kilogramme which means a lot to a poor household. Definitely there must be a check in price of what must be consumed in the economy,” he said.

Mr Promise Ajujumbu, an LPG retailer who confirmed that the current price triggered in May urged government to spur local production of gas so that events at the international market would not distort price because of lack of sustenance.

“The price is currently at N11,000 for 12.5kg, most dealers are selling at the rate of N900 per kg.

“As at April 2021, we bought one Tonne of LPG at the rate of N580,000, now it is being sold at N715,000 for a tonne.

“The cause of the increase is not exclusive to Nigeria. It is a global problem due to the Ukraine and Russian war, as most of their oil is bound by Europe and U.S sanctions.

“So, we cannot patronise them. The pressure now heavily rest on the remaining oil producing countries in the international market, hence the cost of gas skyrocketed,’’ the gas dealer said.According to him, the high cost of transportation of the product, due to high price of Automotive Gas Oil (AGO), known as diesel used by petroleum distributors (tanker drivers) also affected the cost of gas.

“Government should put measures in place to intervene because once there is scarcity, adulteration becomes an issue,” advised.

Some Nigerians also spoke to NAN and urged government to subsidise LPG the same way PMS was subsidised, as they could no longer cope with the constant increase in price.

Mr Jasper Ajala decried the outrageous price of LPG, noting that even the rich were getting frustrated with the current price.

Ajala pleaded with the government to also subsidise the price of domestic gas, as well as find a lasting solution to the country’s energy crises.

“I bought 12.5 kg cylinder of LPG for N10,500, I am a civil servant, and my salary no longer carry my expenses for the month not to talk of paying bills, school fees of children and house rent.

“The government said it is taking measures to safeguarding the environment but they are encouraging felling of trees for firewood by allowing the price of LPG to skyrocket.

“If gas is available and affordable, you can easily enforce the ban on tree felling because people will always use gas.

“There is inflation, and how does government expect the masses to survive if not through subsidy,’’ he said.


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