The rising price of Liquefied Petroleum Gas, popularly called cooking gas, has forced many households, restaurants and other users of the commodity to switch to charcoal and firewood.
Aside from the confirmation of this development by LPG dealers, users of the commodity in many small-scale restaurants in Abuja and Lagos alluded to the fact that they had to adopt the available alternatives to cooking gas in order to stay afloat.
Also, many households, particularly those of low-income earners, are beginning to embrace the use of charcoal and firewood as cooking fuel.
The Manager, Favour Foods, located close to the Federal Ministry of Finance in Abuja, Ms Favour Okon, said, “The price of cooking gas is so high now that it will be tough to use it to cook for the number of customers we get daily and make a profit at the end of the day.
“The 12.5kg cylinder of gas that we bought for about N3,500 earlier this year was sold for between N9,500 and N11,000 sometime last week, depending on where you are buying from.
“Now, tell me, how can you break even when you pay such an amount for gas knowing that you cannot increase the price of a plate of food like that so as not to lose customers?
“So, we now use charcoal. We only use gas when we have exhausted the charcoal or if we don’t have enough supply of charcoal. And surprisingly, the prices of charcoal and kerosene are also increasing too.”
Another food vendor in one of the restaurants at the car park opposite the headquarters of the Nigerian National Petroleum Company Limited in the Central Business District of Abuja told our correspondent that cooking gas was now for the rich.
“Cooking gas is now for big men in society. If not, how can you explain that a product, which was sold for N3,500 around January this year is now crossing N10,000? Isn’t that outrageous,” the food vendor, who simply gave his name as Victor, said.
He also stated that his canteen had now switched to charcoal instead of LPG, but expressed the hope that the cost of the commodity would drop in the future.
A caterer in the Egbeda area of Lagos, Funmilayo Thompson, also lamented the hike in the price of LPG and how the development had forced her to seek an alternative in firewood.
This came as marketers of cooking gas raised the alarm that most of their customers were now using charcoal and firewood and that this could lead to an increase in health crises across the country.
The Executive Secretary, Nigerian Association of Liquefied Petroleum Gas Marketers, Bassey Essien, told our correspondent that the situation could lead to massive job losses, particularly in the LPG retail sector.
He said, “It has been proven that the majority of LPG consumers are reverting to the use of kerosene, charcoal and firewood.
“The nation has to be saved from the impending social upheaval consequent upon the LPG getting out of the reach of the masses, whose disposable income can no longer afford the purchase of even firewood to cook, despite the obvious known health and environmental implications.”
Essien had told our correspondent last week that marketers of cooking gas had stopped importing the commodity.
On Monday, he confirmed that the status quo as per imports was still the same, but expressed the hope that there might be an improvement before the end of the current week.
Investigations showed that the cost of LPG increased by 240 per cent, jumping from N3,000 to N10,200 for 12.5kg between January and October this year.
About 65 per cent of LPG consumed in the country is imported, while domestic production accounts for the balance, hence the halt in imports will further shoot up the price if the situation is not addressed.
Essien explained that the reintroduction of customs duty and Value Added Tax on imported LPG were the basic reasons for the halt in imports by marketers.
The NALPGAM in an open letter that was recently addressed to the Minister of State for Petroleum Resources, Chief Timipre Sylva, urged him to urgently intervene in the skyrocketing price of LPG in the country.
The open letter was signed by the National President, NALPGAM, Olatunbosun Oladapo, and Essien. NALPGAM is the umbrella body of operators of LPG bottling plants licensed by the statutorily empowered government agencies to carry out the business of safe bottling of cooking gas.
The association stated, “The obvious devaluation of the local currency, inability to access foreign exchange by importers, the increasing international price against which the cost of domestic LPG is indexed as well as the anticipated re-imposition of VAT and customs duties with retrospective application have all contrived to push the price of LPG upward.
“It has been observed that the above factors have seriously increased the price of gas to the extent that 12.5kg of gas, which sold for N3,000 in January 2021, now sells for between N10,000 and N10,200, depending on the area of the country.
The association further observed that the hike in LPG price could derail the Federal Government’s decade of gas target as well as its gas expansion plans.
It said the price of LPG had exponentially skyrocketed over the last few months, stressing that the cost of 20 metric tonnes of the commodity as of January 2020 was N3.4m.
NALPGAM added, “But by December 2020, it had gone up to N5.4m; N5.6m in January 2021; N6m in February 2021 and N11m in October 2021 without any signs of abatement.
“The galloping price increases have not only choked marketers, but have drastically reduced patronage by consumers, and may ultimately jeopardise the envisaged gains of the Gas Expansion Policy of the government.”
On measures to help address the rising LPG cost, marketers recommended that the cooking gas produced by the Nigeria Liquefied Natural Gas Company should be priced in naira and not in the United States dollar.
They also noted that it would be nice to increase domestic production and make it higher than the 35 per cent being produced in-country, particularly by the NLNG.
But while reacting to the position of the marketers, the NLNG spokesperson, Eyono Fatayi-Williams, told our correspondent that the firm could only give 450,000MT to the domestic market at the moment.
Nigeria consumes about 1.2 million MT of LPG annually.
She also observed that there were challenges with logistics, such as the delay of vessels at the Lagos port, but stressed that the NLNG was doing its best to deliver on its part in the supply of cooking gas.
She explained that in 2007, Nigeria could only produce 50,000MT of LPG and that the NLNG was asked to intervene, stressing that the gas firm was primarily set up for export.
Fatayi-William stated, “Between 2007 and now, because we have guaranteed supply, the market has grown. Today, Nigeria can take over one million tonnes of cooking gas.
“The maximum production we have of cooking gas is 450,000 metric tonnes annually and the market did over a million metric tonnes last year.
“Also, when we talk about logistics, the maximum amount we can now give, which is the maximum production volume, is less than what the entire country needs. We are not the only producer of LPG, but we can only give 450,000MT.”
On calls by marketers for the intervention of the minister as regards the skyrocketing LPG price, the spokesman for the NNPC, Garba-Deen Mohammad, who only switched recently from being the media aide to Sylva, said the minister had earlier explained that the commodity was a deregulated product.
“We are not in a position to determine gas pricing, because gas is not a regulated product. But, of course, we are also very concerned that prices are rising and so I am actually doing something about it in the interest of the ordinary Nigerian,” Syla had explained during an event in Abuja recently.
Commenting on the issue, an energy expert, Bala Zaka, said as far LPG imports were about 70 per cent, with about 30 per cent local production, the cost of the commodity would remain high.
This, he said, was because importers would have to source for scarce foreign exchange to import the product and that this would definitely reflect in the commodity’s cost.
“About 70 per cent of LPG is imported, while the remaining comes from local production. Until something crucial is done to our refineries by making them functional, we may keep facing the price hike challenge,” he stated.
source: punch ng