Agony of Nigerians over soaring cooking gas price

Many Nigerians have in recent times embraced the use of Liquefied Petroleum Gas (LPG), popularly known as cooking gas, encouraged by its speed in cooking and low health risk.

However, a persistent increase in the cost of cooking gas is now threatening to force average Nigerians to return to charcoal and firewood, with all their well known health hazards.

Indeed, since the beginning of the year, the price of gas has soared beyond the reach of the common man.

It now costs an average of N12,000 to refill a 12.5kg LPG in some parts of Lagos, while the cost of refilling a 5kg cylinder has also increased to N4,750 on average.

Some consumers are now lamenting the continuous increase in the price of cooking gas.

Mr Mike Samson, a businessman who went to Dikram gas depot in Surulere, Lagos, to purchase the product on Friday, said the price hike had become frustrating to consumers.

Samson said, “At this point, we are quite frustrated at the rate at which the price of every commodity in the market keeps surging every single day.

“Imagine the increase from last month to this month, and with every possibility that it might increase again in the next few weeks.

“The development forced some LPG users to shift to charcoal or firewood, as consumers of the commodity raised the alarm over the persistent hike in its price.

“The product has increased by 240 per cent for 12.5kg, moving up from N3,000 to N10,200 within the first 10 months of 2021.”

Mrs Alice Bamidele, a housewife, arrived at her usual gas depot in the Somolu area of Lagos, last week, to refill her 12.5kg gas cylinder but was surprised that what she bought about a month ago at N10,200 had increased to 11, 800.

She lamented that the increase would affect her family’s monthly budget, particularly because her husband, a civil servant, had fixed income.

Another Lagos housewife, Mrs Toun Philips, who resides in Ilupeju, Lagos, expressed her frustration thus, “I bought 12.5kg cylinder at this same depot last month for N10,000, only to be told today that it is now N12,200. This really destabilises my budget.

“What if I didn’t come with extra money, that would have meant that I would have gone back home and not purchased gas and definitely would not be able to cook food at home.

“The government doesn’t seem to be doing anything about the constant increase in the price of cooking gas.

“They (the government) have been encouraging us to use gas instead of charcoal, but with the way things are going, gas may no longer be within the reach of the common man,” she said.

Mrs Juliana Matthew, a restaurant owner, said the increase in the price of gas along with the hike in food prices, automatically increased the cost of production for her business.

“When I consider that I have to pay more for gas and the food items I buy from the market, I cannot help but reduce the quantity or quality of the food or maybe increase the price to make a substantial profit,” she said.

Similarly, the manager of a depot in Lagos, who declined to be mentioned, stated that the selling price at the depot was determined by how much the product was bought from the marketers.

“The increase is not really our fault. We also buy the product to sell to consumers. If there is an increase in price by the marketers, we also have to increase from our end to avoid losses.

“The problem is really from the top of the chain,” he claimed.

Mr Peter Chima, a retailer in the Ikotun area, Lagos, said one of the factors responsible for the high cost of cooking gas was the rising foreign exchange rate of the Naira to the dollar.

“Aside from being a dealer, I’m also a gas consumer, so I understand how our customers are feeling. Gas is not the only thing that keeps increasing in price in Nigeria.

“A great percentage of locally consumed gas is being imported and you cannot rule out the factor of rising dollar and Naira depreciation,” he said.

Mr Afolabi George an Energy Consultant, attributed the high cost of cooking gas to supply not matching the increase in demand.

He said the trend of switching to cleaner energy from local alternatives in the last one decade highlighted the interplay of the forces of demand and supply in the increase in the price of cooking gas.

“More than a decade ago, the demand was just about 60,000 metric tonnes per year as cooking gas was largely unpopular compared to kerosene.

“Today, we consume over one million metric tonnes per year. To meet up with the demand, we have to import.

“It is at this point that importers have to deal with the bottlenecks of scarcity of dollars, government’s recent introduction of 7.5 per cent value-added tax (VAT) and others,” he said.

George said the Russian-Ukraine war also led to shortage of supply of gas in the face of rising demand around the world.

“Russia is the world’s largest natural gas exporter. Due to the imposition of an embargo on its gas, countries like Nigeria that depend on the eastern European country for imports will feel the brunt.

“The price of cooking gas has more than doubled in the last one year.

“The rising LPG prices are a part of a general escalation of other daily living costs.

“Gasoline pump prices, electricity tariffs, basic prescription drug prices and urban mass transportation, form part of the determinants of the escalating living costs and declining living standards,” he added.

He explained that to establish the fundamentals that led to the increase in the price of cooking gas, there was need to understand the micro and macroeconomics of LPG in Nigeria and global trends that impacted the sector.

“First, Nigeria gets a little over 450,000 metric tonnes of LPG from its liquefaction company, the NLNG, co-owned by the Federal Government and three international oil companies, while the actual domestic demand stands at 1.3 million metric tonnes, a shortfall of 850,000 metric tonnes.

“These 450,000 metric tonnes of LPG represent about 100 per cent of its Butane production (Butane gas is less volatile and is suitable for cooking).

“And by committing 100 per cent of its Butane production, NLNG posits that it has prioritised the domestic market, thus meeting its domestic supply target,” he said.

in the sector,” he said.