Why Price Of Cooking Gas Crashed– Marketers
The Federal Government’s ban on the export of Liquefied Petroleum Gas, popularly called cooking gas, has led to a crash in the cost of the commodity from about N1,500 per kilogram to around N900/kg, LPG dealers stated on Wednesday.
Cooking gas dealers under the aegis of the Nigerian Association of Liquefied Petroleum Gas Marketers disclosed this during a courtesy visit on the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, in Abuja.
On February 22, 2024, the Federal Government banned the exportation of LPG in a bid to increase its volume domestically to warrant a crash in price.
It stated at the time that LPG producers in Nigeria and key stakeholders in the industry had been told to stop exporting the commodity out of Nigeria, following the jump in the cost of cooking gas.
Speaking at the meeting with the gas minister on Wednesday in Abuja, the National President, NALPGAM, Oladapo Olatunbosun, commended Ekpo for the courage in ordering the domestication of all LPG produced within the country, stressing that the policy resulted in the reduction and stabilisation of the product’s price in the domestic market.
Olatunbosun, in a statement issued by the minister’s media aide, Louis Ibah, recalled that during a stakeholders consultative forum in Abuja in February this year, the association had drawn the minister’s attention to the fact that some international oil companies operating in Nigeria had been exporting huge volumes of gas.
He had pointed out that if these volumes were to be available for the domestic market, there would be no need to import LPG at exorbitant rates as the product would be available and there would be price stability in the local market.
The NALPGAM president thanked the Federal Government for heeding to their plea, as the government’s intervention made the price of LPG that was sold fo N20m per 20 metric tonnes reduced to N15m.
And at the retail end, there is a corresponding decrease from N1,400 – N1,500 per kilogram to between N900 – N1,000 per kilogram, according to the gas marketer, as contained in the statement.
Olatunbosun was quoted as saying, “We appreciate the fact that at the parley with us you (Ekpo) promised that the issue of exporting LPG in the face of inadequate supply and soar in prices will be addressed, and indeed you have taken steps to walk the talk.
“Today we say thank you because the ban on LPG export has made a lot of changes in the market and consumers can testify to this.
“People who abandoned their gas cylinders due to price hike are coming back and we are confident that by the time the naira gains more weight, consumers will enjoy better price of LPG.”
In his response, Ekpo decried the situation where Nigeria, a major gas producer, was ranked among countries with the lowest consumers of the product.
He assured his guests of President Bola Tinubu’s commitment in deepening the penetration of gas across the country.
He lauded the marketers for their cooperation in bringing down prices to reflect current realities following the ban on the export of LPG.
“We would not have gone that far without your cooperation and support. We are working towards ensuring that our vast gas resources is available domestically at the right price for the public in line with President Bola Tinubu’s aspiration for the sector and economy,” Ekpo stated.
The gas minister stated in February that the government had asked LPG producers to halt the export of the commodity.
Ekpo had said, “With the issue of gas, you have seen the demonstration of the Federal Government by withdrawing all taxes and levies from the importation of gas-related equipment. It is a big incentive.
“On the issue of LPG (cooking gas), we are interacting with the critical sectors to ensure that there is no exportation of LPG. All LPG produced within the country will have to be domesticated. And when this is done, the volume will increase and, of course, the price will automatically crash.
“I’m in contact with the regulator, NMDPRA, we have meetings almost daily with the producers of the gas like Mobil, Chevron and Shell. So there is that hope that things will turn around.
“And that is also why we are having this engagement to know exactly what the problems are so that we can address them once and for all.”
