The average price of a 12.5kg cylinder of cooking gas in Nigeria has increased from N7000 in September 2021 to N9400 as of May 31st 2022, a record high from November 2018. A recent survey shows that Nigerians are considering other alternatives, as the prices of the commodity are on the rise in the country.
The story so far
- The hike in the prices of cooking gas became noticeable when the cost of a 12.5kg cylinder of cooking gas increased by 55% from N4,000 in December 2020 to N6,200 in July 2021.
- The National Chairman of Liquefied Petroleum Gas Retailers Branch of NUPENG, Mr. Chika Umudu, in July 2021 stated that the reason for the high prices of cooking gas was inflation, devaluation of naira, etc which ultimately pointed to Nigeria’s dependence on the importation of Liquified Petroleum Gas (LPG). Nigeria imports 40 – 60% of its cooking gas needs.
- The stakeholders then moved for Nigerian LNG Limited, which is responsible for over 40% of the country’s LPG, to supply the domestic market in real time rather than having a fixed amount of supply per year. The oil marketers believed that backlogs in demand due to limited forex available to them also played a role in the hike in gas prices.
- In September 2021, the federal government reintroduced Value Added Tax (VAT) of 7.5% on imported cooking gas in addition to the already hiked prices of gas. Oil marketers under the aegis of the Major Oil Marketers Association of Nigeria (MOMAN) protested the motion as it hampered the objectives of the ‘Decade of Gas’ agenda by the federal government.
- The board of directors of NLNG in January 2022 then suspended the exportation of cooking gas to focus on the domestic market.
- With the economic situation of the country not improving, the standard of living in the country, particularly the prices of cooking gas worsen.
As the factors that influence the rising cost of cooking gas including inflation, devaluation of naira and low purchasing power of Nigerians continue to strengthen, both rural and urban dwellers would be forced to seek alternative means. And this is outrightly counterproductive to the federal government’s LPG initiative.