Some Oil and Gas experts have advised the Federal Government to invest massively in the sector or provide intervention funds for private investors to stop hike in price of Liquefied Petroleum Gas (LPG).
The experts also advised the Nigeria Liquefied Natural Gas (NLNG) company to allocate enough gas to meet local consumption demand, up to 1.2 metric tonnes, to eliminate impact of foreign exchange.
The experts made these known in separate interviews with the News Agency of Nigeria (NAN), Abuja, on Thursday while reacting to the continuous increase in the price of LPG, otherwise known as cooking gas.
NAN reports that many LPG consumers and retailers had complained bitterly in view of LPG constant price increase and perceived reduction in quality which effect had been unbearable on households and businesses due to its general use.
Dr Olanrewaju Aladeitan, an Oil and Gas Expert, expressed surprise that 60 per cent of our LPG came from imports, whereas Nigeria is more of a gas producing nation than oil.
In view of this, Aladeitan tasked government to invest in the sector or, better still, the Central Bank of Nigeria (CBN) to provide some intervention funds for private investors to cushion the effect.
“Doing this, we would be preparing for the Energy Transition which is here anyway. It will also help in our decarbonisation campaign,” he said.
Also, speaking with NAN, Dr Chijioke Ekechukwu, an Economist, highlighted different reasons the price of LPG had been rising and unstable in the country.
According to him, LPG annual local consumption is about 1.2 million metric tonnes, but NLNG allocates only 350 metric tonnes for local consumption, while the rest is imported.
He said that the imported one is subjected to 7.5 per cent imposed Value Added Tax (VAT).
“The imported price portion is determined by the prevailing exchange rate which hovers between N410 to N570 per dollar.
“Many times due to Port congestions, these imported gas attract demurrage which adds to the cost,” he explained.
To find solutions to this price hike, he said government needed to address all the foregoing causes in order to bring down the price.
He further advised that NLNG should allocate enough to meet the demand of the local consumption, up to 1.2 metric tonnes.
“By doing so, the impact of foreign exchange (forex) and importation as well as associated costs will be eliminated,” Ekechukwu said.
Mr Promise Ajujumbu, an LPG retailer, said that 80 per cent of gas consumed locally was being imported.
He said that gas importers and marketers had complained about the imposed VAT and difficulty in accessing foreign exchange.
“NLG is supplying only 20 per cent of gas for domestic consumption, while 80 per cent was sourced abroad.
”And because of difficulty in sourcing forex from local market instead of getting directly from CBN at official price, at the end, it will affect the price and equally give room for adulterated gas.
“The hike started in April when one kilogramme (Kg) was being sold around N280 and N300 until the price triggered up to N708 per Kg presently.
”Currently 20 tonnes of LPG is sold at N9.5 million against N4 million being sold before the hike.
“Basically Nigeria is already blessed and can produce enough gas for domestic consumption.
”If there should be provision of storage facility and forex as well as removal of VAT the price will come down,” he said.
Mr John Abuchi, another retailer, urged government to resolve the issues responsible for the high cost of gas.
Worried that the price had been increasing on weekly basis, Abuchi said there was no gain in the market ever since then, adding that he had incurred losses.
Mrs Shade Akpan, a gas consumer, described the continuous price hike as preposterous.
She said it would be commendable if the government found lasting solution to the looming gas crisis in the country.
“It is really telling on the pocket and affecting the purchase of a lot of other consumables,” she said.
Another consumer, Mrs Catherine Onyeka, disclosed that in spite of the price hike, there was depreciation in its quality.
Onyeka added that before the looming crisis, her 12.5 LPG cylinder, once refilled for household use, could last for over a month.
She said that now gas was being sold for N8,500, it could barely last three weeks.
“I also use another 12.5 cylinder for my fast food business.
”I am not happy because there is no gain in my business anymore.
”Expenses on gas refiling alone have affected cost of production and the customers’ turnout is reducing also,” she said.
Meanwhile, a senior official from the Ministry of Petroleum Resources who pledged anonymity told NAN that there was a stakeholder engagement to cushion the effect of the continuous price increase.
The official said that oil and gas stakeholders recently met with government representatives and regulatory agencies to come up with suitable option to adopt to crash the gas prices.