The price of cooking gas, or liquefied petroleum gas, has gone up to N1,500/kg as Nigerians grapple with the exorbitant cost of gas.
However, NIPCO Plc’s Managing Director and Chief Executive Officer, Suresh Kumar, expressed concerns about the fact that more than 60% of cooking gas consumed in Nigeria is imported and stated that the Dangote refinery and other domestic refineries would lower the price of cooking gas.
According to checks conducted by our correspondent, as of Sunday, the price of cooking gas peaked at certain retail locations in the states of Ogun and Lagos at N1,500/kg.
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Refilling a 12.5 kg cooking gas cylinder in Abuja now costs, on average, N17,000, up 41.6% over previous prices.
The same commodity sold for N12,000 in July and N11,735 in January 2024, according to Anaedoonline.ng.
This sudden increase in price, which is indicative of market trends, could have an impact on customers, as many of them depend on LPG for their everyday cooking needs.
August saw a pledge from Ekperikpe Ekpo, the Minister of State for Petroleum Resources (Gas), to guarantee a decrease in the steadily rising price per kilogramme of cooking gas.
Ekpo mentioned that he will extend an invitation to the gas producers and regulators to explore cost-cutting measures.
But according to a fresh market analysis our correspondent carried out on Sunday, the price has actually increased even more.
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According to an investigation, the product is currently sold for N17,000 in the FCT’s Lokogoma district, which is 41.6% more than what merchants were charging customers three months prior. This indicates that N1,400 was paid for a kilogramme of petrol.
The goods was sold in Kubwa for between N16,200 and N16,500 instead of the N12,000 that was initially charged. However, the goods sold for N1,300 in the Bwari, Kurudu, and Jikwoyi suburbs.
Depending on the area, several significant distributors still charge between N1,300 and N1,400 for the product.
Ola Oresanya, the Ogun State Commissioner for Environment, previously informed one of our journalists that if the price of LPG keeps rising, many people would turn to cooking with charcoal.
Speaking at the recently finished Nigerian Association of Liquefied Petroleum Gas Marketers 2024 National Conference in Lagos, Kumar did, however, reveal that local production of LPG is still insufficient and urged the Federal Government to push Chevron to convert a larger portion of its output into propane.
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“Currently, less than 40 per cent of the 1.5 million metric tonnes consumed domestically is produced locally. This is why the government must encourage companies like Chevron to convert more of their propane output into butane, which is more suitable for domestic use,” he explained.
In response to enquiries concerning the escalating expense of LPG in the context of a combination of indigenous and imported supplies, the managing director conveyed hope that costs would decrease as domestic output improves, particularly as the nearby refineries get crude oil locally.
“With the Dangote refinery and other refineries now sourcing crude oil in local currency, the volume of LPG produced locally is expected to increase, which will, in turn, drive down the price of the commodity,” the MD explained.
He added, “There is hope that the reliance on imported LPG will decrease, which will positively influence the prices at which the product is sold domestically. Greater local production will make LPG more affordable since it reduces exposure to foreign exchange fluctuations and international pricing dynamics.”
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He said that increasing domestic production will draw additional funding for pipelines, storage, and bottling facilities in addition to allowing the expansion of retail stores and LPG depots throughout Nigeria.
“Our latest assessments show that the existing downstream infrastructure is capable of handling up to 5 million MT annually. This means we are ready to accommodate increased production from both associated and non-associated gas fields within the country,” the MD said.
He pushed for the introduction of incentives by the government to promote investments in gas processing.
He claims that NIPCO entered the market as a marketer of white products (petroleum fuels) when it first began operations in 2004.
He did, however, stress that the company’s long-term goal has always been to become a global leader in LPG distribution and marketing.
Kumar said, “Our strategy was driven by the fact that Nigeria has over 200 trillion cubic feet of gas reserves. We believe that the country’s gas consumption must be optimised through the promotion of both LPG for domestic use and CNG for the industrial and transportation sector.”
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He further emphasised the company’s investments in infrastructure, noting that NIPCO has expanded its LPG operations significantly over the years.
“In 2008, we invested in an LPG facility in Apapa with a capacity of 5,000 metric tonnes. Today, that same facility has grown to over 20,000 metric tonnes, thanks to strategic partnerships with our subsidiaries.
“We have also deployed LPG tankers and established multiple stations across Nigeria to ensure easy access to cooking gas for households nationwide,” Kumar revealed.
He went on to say that although LPG is necessary for homes, CNG would be crucial for industry and for revolutionising the transportation sector.
“When NIPCO entered the market, Nigeria’s domestic LPG consumption was approximately 50,000 metric tonnes annually,” the managing director continued.
“However, the past 16 to 17 years have been a remarkable journey. Today, the market has grown from 50,000 MT to approximately 1.5 million MT per year.”
Though there has been progress, Kumar noted that much potential is still unrealised, with less than 60% of Nigeria’s 200 million people using LPG.
“Our vision is to harness these opportunities and grow the country’s LPG consumption from 1.5 million MT to levels more appropriate for a population of over 200 million people.
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“We must work with the Nigerian Midstream and Downstream Petroleum Regulatory Authority and other stakeholders to end gas flaring in the country. Substantial investments are needed to capture and process flared gas to increase domestic supply beyond the current 1.5 million MT to at least 5 million MT annually,” he stressed.
The NIPCO boss acknowledged that demand for LPG in Nigeria has been relatively stagnant due to the high cost of the product.
“The current high prices have limited consumption growth, but this situation is only temporary. With more players entering the gas processing sector, we anticipate a market correction soon,” he stated, believing that the market would stabilise in the long run.
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