Tougher Times Ahead For Gas Consumers As Marketers Set To Increase Price Next Week

Barring any last minute change in plans, marketers will, from next week, raise the price of cooking gas as a result of the forex exchange crisis currently being experienced in the country.

The President of the Nigerian Association of Liquefied Petroleum Gas Marketers, Olatunbosun Oladapo, who gave the hint advised gas consumers to prepare themselves ahead of the price hike.

He said in view of the current economic realities which includes
rising international prices, high tax rates and prices of vessels, forex scarcity, and naira devaluation, the price of gas can no longer remain static.

The Federal Government has identified gas as a transition fuel and it is expanding the nation’s gas development and gas infrastructure across the country to increase energy accessibility.

Currently, the Nigerian National Petroleum Company Limited Limited plans to sustain and increase Nigeria’s aggressive gas development and gas transportation projects to achieve affordable and clean energy.

The Nigerian LPG prices are internationally benchmarked based on Nigerian Liquefied Natural Gas Contract prices and are always influenced by international prices.

Just like other internationally traded commodities subjected to price fluctuations due to market dynamics, the NLNG Contract Price is subject to changes and can be reviewed either upwards or downwards at least once to three times.

Local consumers of cooking gas have for some months now enjoyed low prices due to a drop in international prices.

The price of LPG dropped from an average of N730 per kilogram in June to around N600/kg in July and increased to N750/kg in August due to the naira devaluation.

As of June, the price dropped by 76.1 per cent to 2.10 per one million British Thermal Units on May 31 from 8.78 per one million BTU, according to U.S. Energy Information Administration.

Speaking on the development, Oladapo said, “The price increase is starting next week because international prices have gone up. The prices of vessels have gone up and taxes are high, but consumers are not earning more.

“Their purchasing power has gone down. Everybody is crying. Consumers, middlemen, and retailers are feeling the impact because business is now on the low side.

“The situation is very unfortunate because prices are going higher. Nigerian consumers are passing through very difficult times because they can no longer afford gas.

“The government should come in and alleviate the suffering of the masses by providing palliatives, reducing taxes and levies.

“You can imagine that for every 1kg of gas priced at N700, tax would take way N3.50. How much is left in such a business?

“Local taxes are worsening the problem,” he said, calling on marketers who had the opportunity to buy products locally to fix prices with ‘consumers’ sympathy’ in mind.”

ENDS