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Tuesday, May 17, 2022

Prices of LPG, Cooking Gas to rise as supply slump

There are indications that the prices of Liquefied Petroleum Gas (LPG), also known as cooking gas, would rise further as supply dips by 5.5 percent to 85,066.546 metric tonnes, MT, in September, from 90,017.002 MT recorded in August 2021.

A market survey showed that the price of 12.5 kg currently stands at N8,500 but could rise further to between N9,000 and N10,000 during the yuletide period that normally record increased demand, according to a Vanguard report.

The price of the cooking gas stands at N8, 000, N4,600 and N4,000 for 10kg, 5kg and 3kg respectively.

In the latest LPG report for September 2021 released weekend, the Petroleum Products Pricing Regulatory Agency (PPPRA), now known as the Nigeria Midstream and Downstream Petroleum Regulatory Agency, stated that, of the 85,066.546 MT supplied, 51,847.085 MT were sourced locally, representing 60.95 per cent, while 33,219.461 MT, representing 39.05 percent were imported.

It also stated that a bulk of the domestic supply was sourced from the Nigeria Liquefied Natural Gas (NLNG), while the imports came mainly from the United States, Algeria and Equatorial Guinea.

Reacting to the limited supply of LPG, the President, Nigeria LPG Association, Nuhu Yakubu, who noted that the sector was still constrained by some problems, especially foreign exchange, high prices and instability, said the association has been engaging with relevant agencies with a view to addressing the issues.

Yakubu, who spoke at the just-concluded 11th International Conference and Exhibition in Lagos, said: “As an association, we are currently engaging with respective government agencies in addressing issues around LPG supply, particularly access to foreign exchange, value-added tax, levies, etc. We believe our efforts will yield positive results in good time.

“Also, it is not far-fetched to state, therefore, that sustaining the growing adoption of LPG through sector-friendly policies and programs will inadvertently support economic growth that will yield jobs and wealth creation.

It is our collective responsibility to make this happen and an event such as this is one aimed at setting the pace.

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“In line with the 7th Sustainable Development Goals (SDGs), deepening education on the role of diverse applicable uses of LPG is critical as the world aims to provide cleaner, reliable, sustainable and affordable energy sources for everyone by 2030.

Worthy of mention is the declaration of the Decade of Gas, by the Minister of State for Petroleum Resources, Timipre Sylva with the support of the President and Commander in Chief, Muhammadu Buhari who ably doubles as Minister of Petroleum Resources.

“The LPG sector is projected as an industry with this executive posturing to galvanize the entire LPG value chain to drive an upsurge adoption of LPG in spurring growth and improving the well being of households across Nigeria.”

Also, in the communique obtained by Vanguard at the end of the event, the experts noted that the nation has very huge gas reserves of over 200 trillion standard cubic feet, but that the current business environment has not been friendly.

Specifically, the communique stated: “That the Petroleum Industry Act, PIA, should be implemented in a manner that will encourage massive domestic and foreign investments, required to stimulate sustainable growth while creating many multiplier effects, including jobs for Nigerians.

“That such new investments are required to reduce Nigeria’s current dependence on imported LPG as well as meet rising future demand based on increased population. That the government should be consistent in the conceptualization and implementation of policies needed to ensure stability in the LPG sector.

“That relevant stakeholders need to be involved and carried along in the process of taking new decisions to ensure successful implementation. That the imposition of the Value Added Tax, VAT, has negatively affected the sector in many unintended ways and should be eliminated.

“That the high prices of LPG have shifted the demand to firewood and charcoal, thus fueling desertification and erosion with a very negative impact on the environment.

That a package of new incentives should be introduced to stimulate investment, processing and utilization of LPG in Nigeria in line with the nation’s Decade of Gas agenda.

“That the LPG sector gasps for massive infrastructural development to stimulate and sustain expansion in the coming years.

“That the government and its agencies should intentionally eliminate all hindrances, especially lack foreign exchange, currently staring the sector in the face.”

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