Cooking gas price to crash as NLNG discharges 13,000 tonnes of LPG

Consumers may now heave a sigh of relief as the skyrocketing price of cooking gas, which hit an all time high of N5,000 from N3,200 is to crash with the delivery of 13,000 tonnes of LPG by the Nigerian Liquefied Natural Gas (NLNG) Limited, in Lagos jetty at the weekend.

General Manager, External Relations, NLNG, Mr. Kudo Eresia-Eke, said following the delivery of the 13,000 tonnes of LPG, the vessel is scheduled to return to NLNG’s facility in Bonny, Rivers State, to reload, adding that NLNG would continue in its efforts to ensure adequate supply and price stability to the market.

Consumers across the country have had to contend with a 53.3 per cent increase in the price of cooking gas in the last two weeks.

But NLNG in the heat of the scarcity denied news making the rounds that it increased the price of LPG. The company, in a statement by its spokesman, explained that domestic LPG price is based on an international price index plus 50 per cent of the shipping cost of delivering the product to receiving facilities in Apapa, Lagos.

He stated that the price is invoiced in naira at the prevailing official interbank exchange rates, contrary to erroneous assertions made in parts of the media.

Aside from the above, he explained that recent delays to vessel discharges at the receiving facilities in Apapa, Lagos, which are multi-use terminals with berthing priority accorded to vessels discharging other oil products (petrol, DPK and diesel), have also led to a temporary supply disruption over the last two to three weeks.

‘‘For instance, NLNG’s dedicated LPG vessel has been unable to discharge LPG at the Apapa port since December 29, 2016 due to jetty unavailability, resulting in temporary product shortages in the market,’’ he had said.

President of the Nigerian Association of LPG Marketers (NALPGAM), Mr. Basil Ogbuanu, told Daily Sun in a recent interview that the practice where LPG is priced at an international price index remained a setback for the sector.

Ogbuanu argued that the practice, if not addressed, would erode the gains already recorded, which is aimed at deepening the usage of LPG. On the other hand, he said the weak exchange rate of the naira against the dollar has further increased the price of LPG.

‘‘Rather than use the official exchange rate, the black market rate is used for the conversion and this has led to a 20 metric tonne of gas selling for about N5.5 million as against N3.5 million in November 2016. You will also have to consider the cost of diesel to power the generators when the gas gets to the plants. A litre of diesel now sells for N250. All these costs eventually lead to increase in retail price of gas,’’ he lamented.

“Even if the vessels are allowed to discharge now, the cost of 12.5kg from a reasonable wholesale plant cannot be less than N4,000. So the situation on hand is not that of price hike but increment,’’ he lamented.

On his part, the National Chairman, Liquefied Petroleum Gas Retailers (LPGAR) branch of NUPENG, Mr. Chika Michael Umudu, had decried the ongoing instability in the supply and pricing of cooking gas across the country.

And to address the issue surrounding incessant LPG scarcity, Umudu appealed to the government to go back to the drawing board and revitalise the 2007 Obasanjo LP Gas policy, which helped to generate some improvements in the sector, thereby making the product relatively affordable to the lower stratum of the Nigerian society.