By Eyo Nsima

The Executive Secretary, Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), Mr. Bassey Essien, said, the price of 12.5kg could hit N10,000 in December 2021, if urgent steps are not taken to address issues in the market.

Speaking at the Platform Africa discourse, monitored by The Daily, www.thedaily-ng.com, Saturday, he said: “The price of gas has been on the upward swing for some time now. These are based on the price Marketers buy the product from the depots and terminals. Early in 2020, a 20metric ton truck of LPG sold for N3.4m, by Dec 2020, it had gone up to N5.4m and N5.6m in Jan 2021.

“As of today, a 20metric ton truck sells for N8m. The average cost of a 12.5 kg cylinder of gas sells for about N6,000 and if the situation persists till Dec 2021, a 12.5kg cylinder of gas may sell for N10,000 or more. My Association, the Nigerian Association of LPG Marketers have made so much advocacy to draw the attention of the government to address the factors that are responsible for the price surge particularly in line with the declaration of the decade of gas, but we are yet to see any move made by the government.

“Rather than do the needful, the government is re-imposing VAT on imported LPG, which has been on the exemption and gazetted since 2018. The re-imposition of the VAT takes a retrogressive application to years back. So if importers are made to pay for the VAT element, the associated cost will be passed to consumers.

Commenting on the major drivers of the market, he said: “Many factors can be adduced. Firstly there is insufficient availability of gas for domestic consumption. Gas is the only refined petroleum product that is produced wholly in the country and exported as a purely finished product.

“Nigeria is a net exporter and a net importer of gas. With the enormous abundance of gas in the country, only 35% of it is available for domestic consumption while the balance 65% of the volume consumed is imported. Even the 35% is irregularly supplied. Because the supply cannot meet the demand, the interplay of forces of demand-supply sets in. There are other associated costs paid in foreign exchange domestically, levies and charges which all put together add to the cost of the product.”

Speaking further, he said: “The industry is deregulated and this was to allow for investors to easily invest in the industry without government regulating prices as being done with PMS. The problem we have is the inadequate supply of gas to the domestic market.

“The NLNG is the source of LPG in the country but it’s allocation into the domestic market is just 450,000 metric tons out of current the consumption level of over a 1.2million metric tons leaves a difference of which the difference of 750,000 metric tons is sourced from importation with the attendant freight charges, import duties, and high exchange rate, etc. which account for the high cost of gas.

“If all the gas produced rather than being fully exported are put into the domestic market to meet supply and discourage importation which will stabilize the price of gas, then the advantage of the deregulation would be felt positive.”

However, on safety, he said: “Like every product we use, their user manuals and safety measures to be applied. The same applies to the use of gas. Cylinders should be kept outside the kitchen for good ventilation. The hose is piped into the kitchen and connected to the cooker. Only strike the match first before turning the knob of the cooker so that as the gas comes out it gets lighted and not the other way round. The hose should be changed periodically and the regulator as well. If possible, a fire extinguisher should be kept handy within the kitchen. Following all safety precautions will ensure the eradication of any gas accidents.”