Marketers of Liquefied Petroleum Gas (LPG), under the aegis of Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), have warned that prices of cooking gas may rise ahead of festive season due to the indiscriminate hike in the price of the product by 75 percent in the last two weeks.
He said within a five-day period, the price of a 20 metric tonnes of LPG which sold for N3.15 million, suddenly increased to N3.5 million and N3.9 million.
“A few hours thereafter, the price moved to N4.2 million despite the fact that same product has been in the storage of these terminals when price was even N3.5 million, so why the sudden upsurge,” he said.
He said the price hike would ultimately dovetail into high prices to the consumers who unfortunately are also caught up in the web of price hikes.
“At this time of the year in the past, price hikes used to be attributable to winter season, increased demand for heating energy and international price index.
“This we have consistently questioned why a product in abundance in our country should become such a victim of any slightest issue occurring internationally.
“Efforts to extract the cause of the sudden and hourly price increase from the terminals have not been met with any positive response.
“At one of the terminals, there was an outright denial of any price increase; however, price of LPG has been moved from N3.9 million to N4.2 million. A representative of the company insisted rather that the company had no stock.
“But when asked to explain the sudden price increase to N4.2 million when company had no stock, he was evasive,’’ he said.
Essien said it became necessary to react to the current price hike of cooking gas in spite of the efforts of the government and stakeholders to deepen the usage of LPG in the country.
“The association is hereby disassociating itself and members from the antics of the current price hike and therefore maintaining that the price increase is not the handiwork of marketers, but rather that of the terminal owners, importers and the NLNG.
“Marketers are equally bemoaning the situation as the development has adversely affected business planning.
“If the trend is not halted immediately, the price of a 12.5kg cylinder of cooking gas may soon sell for over N6,000 and well out of the purchasing power of the average consumer.
“This brings to questioning when the issue of product availability will ever be holistically addressed. We cannot deepen the use of LPG if availability of the product is not guaranteed,’’ he said.
Essien said there was urgent need to reverse the price hike.
He, however, called on the NLNG to flood the market with cooking gas since they had the capacity to do so and increase the frequency with which the vessels deliver LPG from Bonny to the terminals, particularly in the Lagos axis.
He said NLNG should supply LPG to other coastal terminals outside Lagos to reduce the inherent pressure on the terminals in the Southwest.
Essien also said vessels of smaller capacities should be deployed to access the coastal terminals if product availability must be achieved.
He urged LPG importers to free the PPMC depot in Lagos for the delivery of NLNG product allocation.
He said NALPGAM had embarked on the campaign of creating awareness and education of the populace particularly in the rural communities on the safe handling of LPG as the most efficient cooking energy.
According to him, this is in the quest to achieve further deepening of LPG usage in the country.
“In the campaign, the association had given out over 7,000 cylinders with burners to lucky beneficiaries in Lagos, Edo, Oyo and Akwa Ibom states, while still mapping out to do same in other states.
“We thus urge the government and NLNG to urgently increase the quantity of LPG earmarked for domestic consumption as the present allocation cannot sustain demand.
“NLNG should also work out a more robust delivery logistics so that there will be no supply lacuna. Many terminals are now operational aside those in Lagos and to reduce the pressure on Lagos, the wear and tear of the roads and traffic gridlock in Apapa.
“NLNG should extend their supply logistics to reach terminals in Rivers, Delta, Edo and Cross River states consistently and timely with LPG if the supply situation must improve.
“We cannot suffer in the face of abundance of a product we are blessed within Nigeria. If the situation does not abet, we will soon face imminent LPG scarcity, Essien said.
Essien said some marketers who had paid down for LPG when the price was N3.45 million in a particular terminal but were awaiting loading, were being intimidated with refund of their money.
“Except they agree to pay the difference in the new price despite having tied down their funds without loading their trucks,” he said.
One of the LPG terminal operators, who preferred anonymity attributed the increase was as a result of Federal Government circular to commence VAT on imported LPG.
The source said that importing LPG is more expensive because NLNG only supply domestic market with 350,000 metric tonnes as against one million metric tonnes market demand.
According to him, NLNG cannot meet domestic demand and there is need to import LPG to cushion the gap, adding that the government’s taxing of import has led to the increase in price.
“Domestic gas is not taxed and it can meet domestic demand. We hope that government will find way to address the issues before it goes out of hand.”
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